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Financial ratios are used in two different ways. The first ratio is used for a company over time while the other is used against that of other companies.

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What is ratio analysis and importance of ratio analysis in financial management?

what is ratio analysis


What are the scopes of financial ratio analysis?

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Would you prefer a low debt to equity ratio for your financial situation?

Yes, a low debt to equity ratio is generally preferred for a more stable financial situation. This ratio indicates lower financial risk and a stronger financial position.


What are the Benefits of financial ratio analysis?

One of the main benefits of financial ratio analysis is that it simplifies financial statements. Another advantage is that vital information is easily highlighted.


Which type of financial ratio statement is used to judge how well an organization will be able to meet its short term financial obligations?

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What ratio or other financial statement analysis technique will you adopt for analysis of liquidity of a firm?

What ratio or other financial statement analysis technique will you adopt for this.


Which financial ratio is the best measure of the operating effectiveness of a firms management?

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Ratio in isolation provide into the financial performance and financial position?

rations in isolation reveal little about financial position and financial performance of business.


What are the advantages and disadvantages of a high leverage ratio?

disadvantages of a high leverage ratio in financial crisis


What is the root word of the word interpret?

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How does a business calculate the current ratio and why is it important for financial analysis?

A business calculates the current ratio by dividing its current assets by its current liabilities. This ratio helps assess a company's ability to cover its short-term debts with its current assets. It is important for financial analysis because it indicates the company's liquidity and financial health. A higher current ratio generally suggests a stronger financial position.


What is the significance of personal debt to equity ratio in determining an individual's financial health?

The personal debt to equity ratio is important in assessing an individual's financial health because it shows how much debt they have compared to their assets. A high ratio indicates a higher level of debt relative to assets, which can be risky and may lead to financial instability. On the other hand, a low ratio suggests a healthier financial position with more assets than debt, indicating better financial stability and ability to manage financial obligations.