Hi, I need some assistance with the following inquiry:
Discuss the importance of the calculation and interpretation of ratios to complete an effective financial ratio analysis.
Ratios are an integral part of a thorough, effective financial statement analysis. Financial ratios are segregated according to the financial aspect of the particular business that the ratio has measured. For example, activity ratios measure how quick a company can convert non-cash assets to cash, liquidity ratios measure how available the cash is to pay company debt. Profitability ratios will measure how the company is using assets ...
The solution discusses the importance of financial ratios in 273 words.