Analysis of financial ratios
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Financial ratio analysis is conducted by for groups of analysts: managers, equity investors, long-term creditors, and short-term creditors. What is primary emphasis of each of these groups in evaluating ratios?
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Solution Summary
The answer contains the main focus of each group of analysts viz., equity holders, managers, short term crediors,long term creditors while analysising the financial ratios.
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Financial ratio analysis is conducted by for groups of analysts: managers, equity investors, long-term creditors, and short-term creditors. What is primary emphasis of each of these groups in evaluating ratios?
Financial Ratios depict the relation between the two figures in the financial statements. Ratios depict the financial strengths and weaknesses of the company. Financial ratios are calculated by the various stakeholders of the organization for different purposes:
Managers:
Managers calculate profitability ratios to find the profitability of the organization for the given period. If the performance of the company is excellent and has been growing over the years, then the managers can get higher salary and can get ...
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