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Current ratios, Debt ratios, Quick ratios and Price ratios

Detailed explanation of Current ratios, Debt ratios, Quick ratios and Price ratios with examples.

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Within financial analysis, banks and investors need qualitative information to understand and comprehend the information. Ratios are a 'rule of thumb study' of financial reports. Ratio analysis can assist banks and investors in the comprehension of a business's fiscal operations; and it can evaluate and contrast inter and intra firms. Ratio analysis entails processes in interpreting and calculating monetary ratios to inspect the performance of a company. More importantly though, is the interpretation of the results which needs to be concluded by analysts. (Gitman, L.J., 2009)

Four types of ratios are: Current Ratio, Debt Ratio, Quick Ratio and Price Earnings Ratio. (Gitman, L.J., 2009)

Current Ratio
Current ratios are exceedingly significant for both banks and investors, since banks and investors invest money for the operations of a company. This faction has an implied interest in the functioning and operations of a business. Therefore, Current ratios afford short term lending to a firm. Economic institutions need to identify their short term liquidity position and collection timeframe ...

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Within financial analysis, banks and investors need qualitative information to understand and comprehend the information. Ratios are a 'rule of thumb study' of financial reports. Ratio analysis can assist banks and investors in the comprehension of a business's fiscal operations; and it can......

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