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Ratio Versus Category of Ratios

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Do you know the difference between a category of ratios versus specific ratios?

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Solution Summary

"Therefore different specific ratios serving some common purpose are listed or included in different groups or categories...." More in response including a table showing common ratios in each category.

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Categories of Ratios and Specific Ratios

The primary goal of financial management is to maximize the stock price and not the net income or Earning Per share (EPS).Analysis of any firm's financial statements can highlight its shortcomings and that information can be used to improve performance. Financial statements are used by internal as well as external users with different objectives. Therefore different specific ratios serving some common purpose are listed or included in different groups or categories. Managers aim to improve performance. Lenders are interested in evaluating possibilities or capability of the firm of repaying ...

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