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You will learn accounting ratio in details. Also this is a very good document for remembering things before exam. Go through the notes and do comment.
Typology: Cheat Sheet
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What is Ratio Analysis? Ratio analysis is a financial tool that uses mathematical calculations to evaluate a company's financial performance. It involves comparing different line items from a company's financial statements (income statement, balance sheet, and cash flow statement) to gain insights into its profitability, liquidity, solvency, and efficiency. Why is Ratio Analysis Important? Ratio analysis is crucial for various stakeholders, including: Investors: To assess a company's investment potential and risk. Creditors: To evaluate a company's ability to repay loans. Management: To monitor performance, identify areas for improvement, and make informed decisions. Types of Ratios Ratio analysis categorizes financial ratios into several main types:
o Quick Ratio (Acid-Test Ratio): Measures a company's ability to meet short- term obligations without relying on inventory. Formula: (Current Assets - Inventory) / Current Liabilities