Ratio Analysis
Ratio Analysis
percentage, or as a rate
Words of caution
A ratio is not an end in itself. They are only a
means to get to know the financial position of
an enterprise.
Computing ratios does not add any information
to the available figures.
It only reveals the relationship in a more
meaningful way so as to enable us to draw
conclusions there from.
Utility of Ratios
Accounting ratios are very useful in
assessing the financial position and
profitability of an enterprise.
Expenses ratio
Profitability ratios
Profitability ratios in relation to investments
Return on assets (ROA)