Introduction Investors and other external users of financial information will often need to measure the performance and financial health of an organization. This is done in order to evaluate the success of the business, determine any weaknesses of the business, compare current and past performance, and compare current performance with industry standards. Financially stable organizations ...
If you find this article helpful, you may wish to read the article titled Using Ratio Analysis to Assess Financial Stability. Introduction Financial statement information is used by both external and internal users, including investors, creditors, managers, and executives. These users must analyze the information in order to make business decisions, so understanding financial statements ...
Ratio Analysis is the basic tool of financial analysis and Financial analysis itself is an important part of any business planning process as SWOT (Strengths, Weaknesses, Opportunities and Threats), being the basic tool of the strategic analysis plays a vital role in a business planning process and no SWOT analysis would be complete without an ...
Financial ratio analysis is perhaps the oldest and most essential tool used to evaluate a company’s credit position and overall financial performance. Financial statements of a company generate a large number of ratios which analysts use depending on the company’s activity or purpose of analysis. Although the application of ratio analysis is widespread, it poses ...