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What is the meaning of ratio analysis types of ratio analysis importance of ratio analysis?
RATIO ANALYSIS Meaning and definition of ratio analysis:
Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two variables. Significance or Importance of ratio analysis:
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It helps in evaluating the firms performance:
With the help of ratio analysis conclusion can be drawn regarding several aspects such as financial health, profitability and operational efficiency of the undertaking. Ratio points out the operating efficiency of the firm i.e. whether the management has utilized the firm's assets correctly, to increase the investor's wealth. It ensures a fair return to its owners and secures optimum utilization of firms assets •It helps in inter-firm comparison:
Ratio analysis helps in inter-firm comparison by providing necessary data. An interfirm comparison indicates relative position.It provides the relevant data for the comparison of the performance of different departments. If comparison shows a variance, the possible reasons of variations may be identified and if results are negative, the action may be intiated immediately to bring them in line. •It simplifies financial statement:
The information given in the basic financial statements serves no useful Purpose unless it s interrupted and analyzed in some comparable terms. The ratio analysis is one of the tools in the hands of those who want to know something more from the financial statements in the simplified manner.
What else can I help you with?
What are the types of liquidity ratios?
1) Statutory Liquid Ratio 2) Cash Reserve Ratio
What are the different type of ledgers in accounting and its meaning?
what are different types of accounting what are different types of accounting
What are some types of liquidity ratios?
current and quick ratios. The quick (acid test) ratio is a more accurate measure of liquidity because it excludes inventories.
What are the types of bank drafts?
There are regular bank checks, corporate checks, and certified checks. These are all considered bank drafts, meaning the funds must still be cleared by the bank itself.
What are the four main types of farm records?
Four main types of farm records are financial, machinery repairs/maintenance, crop production, and livestock production records. Even within these four records, other types come up. For instance in financial records, there are records to be kept for sales and purchases, income tax statements, utility bills for gas, water and electricity, rental/leasing records, gross income budget analysis which get used to determine annual net income, etc.
types of ratio analysis?
generally, there are five types of ratio analysis which are done by companies. they are:a) Profitability analysisb) Liquidity analysisc) Solvency analysisd) Asset efficiency analysise) Market value analysis
How many different types of analysis are there?
HOW MANY TYPES OF ANALYSIS
What are two main types of analysis?
There are six types of analysis, including descriptive and exploratory. Inferential, predictive, causal, and mechanistic are the other types of analysis.
How many types of chemical analysis?
There are several types of chemical analysis, including qualitative analysis, quantitative analysis, instrumental analysis, and spectroscopic analysis. These methods are used to determine the composition, structure, and properties of substances.
Types of analysis?
1)ac analysis 2)dc analysis 3)transient analysis
What are the types of analysis in GIS?
The main types of analysis in GIS include spatial analysis, which analyzes the spatial relationships and patterns of geographic data; attribute analysis, which focuses on the non-spatial attributes of geographic data; and network analysis, which examines the connectivity and accessibility of geographic features in a network. Other types of analysis include terrain analysis, suitability analysis, and interpolation analysis.
What are Different Types of financial analysis?
Following are two kinds of financial analysis: 1 - Horizontal Analysis 2 - Vertical Analysis
What are the different types of statistical analysis used in the estimation of production function?
Time series Analysis Cross-section Analysis Engineering Analysis
What is the importance of computers in the day to day operations of people?
For all practical purposes, computers of all types are part and parcel of modern day business and government as well. Record keeping, various types of business analysis and projections are all done with computers.
What are the types of structures in structural analysis?
BeamsFramesTrussesArches
What are the types of liquidity ratios?
1) Statutory Liquid Ratio 2) Cash Reserve Ratio
How do you work on IT asset management. And what are the types of analysis done on it.?
hi, I don't know much about the types of analysis, i will tell you what i know which will definetely be helpful for you. Actually IT Asset Management has three types of analysis Financial Analysis, Operational Analysis and Workforce analysis. And to say about IT Asset Management its function is to support Management over the IT environment. To get some more detailed idea about this follow the link which i have referred previously. http://www.searchtwice.com/itasset_management.asp
