Purchase Solution

an example of ratio analysis

Not what you're looking for?

Ask Custom Question

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

Purchase this Solution
Solution Summary

This question involves the fundamentals of ratio analysis.

Solution Preview

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

Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

View More Free Quizzes
Related BrainMass Solutions

  • Financial Analysis: Ratio Analysis

    187327 Standards for comparisons in financial analysis What are the standards for comparisons in financial analysis? Give an example of each. Financial Analysis: Ratio Analysis Ratio analysis is used for the comparison in financial analysis.

  • Horizontal and Vertical Analysis

    Vertical analysis is a form of comparison where a financial user might measure, for example, the ratio of current assets to total assets.

  • Business policy and strategy and financial ratio analysis

    //Ratio analysis is an important tool to measure profitability of any company, which evaluates its financial position and performance.

  • Accounting Vertical Analysis

    A vertical analysis of an income statement is usually expressed in percentages based on a percentage of sales.

  • Ratio Analysis

    You can also use ratio analysis to identify the risk of fraud. Here is an example: http://www.sequenceinc.com/fraudfiles/2007/09/finding-fraud-by-looking-at-ratios/ Ratio analysis is also useful for identifying trends.

  • Liquidity & solvency ratios

    //Above, we discussed Horizontal Analysis. Moving to the next part of the instructions, we will discuss 'Liquidity ratio' with the help of an illustrative example.// 3.

  • Financial Terminology and Health Care Finance

    The ratios are expressed as either a decimal value or given an equivalent percent value. Ratio analysis forms an important part of financial statement analysis.

  • Analyze financial statements: Use ratios? Which ratios?

    An example of analysis that be extracted from these ratios are the higher the net income, the higher the return on common equity, which is attractive to potential investors.

  • Horizontal analysis and other methods

    For example, suppose that in an earlier year, Cost of Goods Sold was 50% of Sales. Now, suppose that in the current year, Cost of Goods Sold is 70% of Sales.

View More Related Solutions