What is financial ratio analysis and how is it used?
What is financial ratio analysis and how is it used?Answer: Financial ratio analysis is a valuable tool for your small business. First, you have to learn to calculate the ratios and understand what they mean. They are a comparative tool of analysis for liquidity, profitability, debt, and asset management. These are the major categories of financial ratio analysis. You need to have industry ratios and/or time series data from your own firm for a basis of comparison. Then, you can compare the ratios for your firm to