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an example of ratio analysis

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

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Solution Summary

This question involves the fundamentals of ratio analysis.

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Hi there,
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<br>Here is your answer:
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<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.
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<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 ...

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