Asked in
Business & Finance
Business Plans
Financial Statements
Angel and Venture Capital

How the financial ratios are beneficial to organization?


User Avatar
Wiki User
September 17, 2014 11:40PM

Financial ratios are usually done at the beginning of every fiscal year within the organization and goals are set in order to maximize profitability. These ratios are reevaluated and looked at usually every quarter to determine how business is running within the organization. Without the financial ratios, it would be difficult for organizations to determine if they are running their operations efficiently. If the numbers are not matching up between 'the planned ratio' and 'the actual ratio' then the organization will need to take a closer look into the operations of less successful stores.