Explore BrainMass

Explore BrainMass

    an example of ratio analysis

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Can you please explain an example of ratio analysis before? Where
    would it be helpful? Where could it hurt?

    © BrainMass Inc. brainmass.com June 3, 2020, 5:15 pm ad1c9bdddf

    Solution Preview

    Hi there,
    <br>Here is your answer:
    <br>Ratio analysis is an excellent method for determining the overall financial condition of your small business. It puts the information from a financial statement into perspective, helping to spot financial patterns that may threaten the health of your company.
    <br>Ratios are also very useful for making comparisons between your business and other businesses in your industry. For example, comparing ratios can indicate whether a business is holding too much inventory or collecting receivable too slowly. This ...

    Solution Summary

    This question involves the fundamentals of ratio analysis.