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Use of Financial Ratios by Stakeholders

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Financial ratio analysis is conducted by managers, equity investors, long term creditors and short term creditors. What is the primary emphasis of each of these groups in evaluating ratios?

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Financial ratio analysis is conducted by managers, equity investors, long term creditors and short term creditors. What is the primary emphasis of each of these groups in evaluating ratios?

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Most managers are rated according to the profitability of their divisions; those in upper management are rated according to the company's overall profitability. Thus, managers tend to emphasize profitability rations such as profit margin and return on investment. (The exception may be the manager of the Treasury department, ...

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