# Analyze financial statements: Use ratios? Which ratios?

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You have been given the financial statements and asked to analyze the financial performance of your division. Other managers have suggested you use financial ratios in your analysis. What are financial ratios? Which ratios might you use in your analysis? List them and explain what information they provide. How would you use them to make managerial decisions?

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You have been given the financial statements and asked to analyze the financial performance of your division. Other managers have suggested you use financial ratios in your analysis. What are financial ratios? Which ratios might you use in your analysis? List them and explain what information they provide. How would you use them to make managerial decisions?

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Financial ratios are designed to help one evaluate a financial statement (the financial performance of a company). For example, they are used to compare a firm's debt to its assets. Such comparison is the ratio analysis.

The ratios I would use in my analysis would be the liquidity ratios which includes current ratio and quick ratio. Liquidity ratios measure the relationship of a firm's cash and other current assets to its current ...

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