FINANCIAL RATIOS: WHAT DO THEY MEAN? (Part 1)
The purpose of calculating ratios is to get a bird’s eyeview of the financial situation of a business by analysing the relationships between different amounts on the financial statements. The major advantages of using ratio analysis is that it simplifies the information in the financial statements and allows you to compare the ratio results over […]
FINANCIAL RATIOS: WHAT DO THEY MEAN? (Part 2)
The purpose of ratio analysis is to simplify the financial situation of a business by looking at the relationships between different categories of accounting data. The amounts used in ratio analysis will normally be read from a set of financial statements. Two important limitations of ratio analysis which must be kept in mind are: Two […]