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Ratio Analysis


Ratio analysis is a commonly used tool of financial statement analysis. Ratio is a mathematical
relationship between one number to another number. Ratio is used as an index for
evaluating the financial performance of the business concern.

Ratio Analysis
[Post Image Courtesy of CoolDesign at FreeDigitalPhotos.net]

An accounting ratio shows the mathematical relationship between two figures, which have meaningful relation with each other. Ratio can be classified into various types. Classification from the point of view of financial management is as follows:

● Liquidity Ratio

● Activity Ratio

● Solvency Ratio

● Profitability Ratio

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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