There are a lot of financial ratios which are used for ratio analysis for the scope of Class 12 Accountancy students. Financial ratios are grouped into the following categories. Financial ratios can be grouped into the following clusters of ratios where each cluster is targeted at a different type of analysis. Top 5 Types of Ratio Analysis. It facilitates a company in ascertaining its financial health ie its financial performance whether it is gaining profits or suffering losses. For a quick indication of a businesss financial health in key areas ratio analysis comes handy. Analysis of financial ratios serves two main purposes. Ratio analysis is broadly classified into four types. This categorisation is based on the nature of the information they provide. Main Purpose of Ratio Analysis are in ascertaining the financial.
The following groups of ratios are considered in this article which are as follows. Categories of Ratio Analysis. Types Of Ratio Analysis. Liquidity ratios are helpful in determining the ability of the company to meet its debt obligations by using the current assets. Most of them are used by industry outsiders to make projections and identify trends from information provided by a firms financial statements. Financial ratios can be grouped into the following clusters of ratios where each cluster is targeted at a different type of analysis. Ratio analysis is an important tool that is used in inter-business and intra-business comparison. Ratio Analysis are considered as a powerful tool among the various tools of financial statement analysis. This categorisation is based on the nature of the information they provide. Learning Objectives Classify a financial ratio based on what it measures in a company.
This categorisation is based on the nature of the information they provide. For the purpose of analysing the balance sheet and the profit and loss account to compute ratios it is useful to rearrange and redraft them. The following groups of ratios are considered in this article which are as follows. Ratio analysis is broadly classified into four types. Analysis of financial ratios serves two main purposes. Learning Objectives Classify a financial ratio based on what it measures in a company. For a quick indication of a businesss financial health in key areas ratio analysis comes handy. It facilitates a company in ascertaining its financial health ie its financial performance whether it is gaining profits or suffering losses. Uses and Users of Financial Ratio Analysis. Top 5 Types of Ratio Analysis.
2 Evaluation of Operational Efficiency. Categories of Ratio Analysis. Most of them are used by industry outsiders to make projections and identify trends from information provided by a firms financial statements. Different types of Ratios. Gross Profit Ratios Net Profit Ratio Expense ratio etc provide a measure of the profitability of a firm. Market value ratios. Ratio analysis consists of calculating financial performance using five basic types of ratios. Uses and Users of Financial Ratio Analysis. Types Of Ratio Analysis. Top 5 Types of Ratio Analysis.
Ratio Analysis is done to analyze the Companys financial and trend of the companys results over a period of years where there are mainly five broad categories of ratios like liquidity ratios solvency ratios profitability ratios efficiency ratio coverage ratio which indicates the companys performance and various. Profitability liquidity activity debt and market. Uses and Users of Financial Ratio Analysis. Ratio analysis is broadly classified into four types. There are a number of categories that are used to group the different types of ratio analysis. Categories of Ratio Analysis. Top 5 Types of Ratio Analysis. Ratio analysis is an important tool that is used in inter-business and intra-business comparison. This categorisation is based on the nature of the information they provide. There are a lot of financial ratios which are used for ratio analysis for the scope of Class 12 Accountancy students.
