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  1. What are Financial Ratios? Financial ratios are created with the use of numerical values taken from financial statements to gain meaningful information about a company.

  2. May 4, 2024 · Accounting ratios - a complete list. Accounting ratios are those ratio comparisons that can be derived solely from the financial statements. They are used to form conclusions regarding the liquidity, leverage, profitability, and working capital usage of a business.

    • Profitability Ratios. Gross Profit Rate = Gross Profit ÷ Net Sales. Evaluates how much gross profit is generated from sales. Gross profit is equal to net sales (sales minus sales returns, discounts, and allowances) minus cost of sales.
    • Liquidity Ratios. Current Ratio = Current Assets ÷ Current Liabilities. Evaluates the ability of a company to pay short-term obligations using current assets (cash, marketable securities, current receivables, inventory, and prepayments).
    • Management Efficiency Ratios. Receivable Turnover = Net Credit Sales ÷ Average Accounts Receivable. Measures the efficiency of extending credit and collecting the same.
    • Leverage Ratios. Debt Ratio = Total Liabilities ÷ Total Assets. Measures the portion of company assets that is financed by debt (obligations to third parties).
  3. May 3, 2024 · What are Financial Ratios? Financial ratios compare different line items in the financial statements to yield insights into the condition and results of a business. These ratios are most commonly employed by individuals outside of a business, since employees typically have more detailed

  4. Aug 21, 2024 · Accounting ratios indicate the company's performance by comparing various figures from financial statements and the results/performance of the company over the last period, suggesting the relationship between two accounting items where financial statement analysis performs using liquidity, solvency, activity, and profitability ratios.

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  5. Definition. Balance sheet ratios are the ratios that analyze the company’s balance sheet which indicate how good the company’s condition in the market. These ratios usually measure the strength of the company comparing to its peers in the same industry.

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  7. Jun 28, 2024 · Accounting ratios are a group of metrics used to measure the efficiency and profitability of a company based on its financial reports. An accounting ratio compares two line items in a company’s...

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