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Discussion of Financial Ratio Analysis

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Hi, I need help with a written paper on financial ratio analysis. I need to discuss what is it used for and how to use it. I am not too sure how to approach this. Any assistance would be appreciated.
Also, could you tell me about some of the weaknesses of using financial ratios.

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Solution Summary

This solution provides an overview of financial ratio analysis and provides some advice about writing a paper on the subject. The solution provides one reference link for further investigation of the topic.

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Ratios help us in understanding the performance of the organization. It is the relationship between two or more financial figures. It is used to:
1) Identify the strengths and weaknesses of the organization.
2) Evaluate the performance of the organization.
3) Facilitate the comparison.
4) Create a benchmark.
5) Control the performance of the organization.

Ratios can be used in the following manner:
1) To understand liquidity
Current ratio is used to understand the liquidity. Current ratio = Current Assets/Current Liabilities & Quick Ratio ...

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