Financial Statement Analysis

Financial Statement Analysis Provides information on pecuniary assertion analysis especially drawing proportion analysis to apologise financial circumstances. balance Analysis A financial ratio helps investors in analysis of financial health of the company and forms the basis on which investments are planned. Lets look at some of the widely employ rations for analysis of various aspects related to financial health of the company. ? accepted proportion Current Ratio tells us the current financial strength of the company, primarily in terms of the cash and cite standing of the company. It answers questions like Is the company spending too a great deal or is it holding too much cash hind end? Current Ratio = Current Assets / Current Liabilities ? Debt to loveliness Ratio Debt to Equity ratio tells us the amount of debt of the company against the shareholders equity Debt to Equity ratio = resume Liabilities / Total Shareholders Equity ? Asset Turn everyplace Ratio The ratio tells us the kind of revenue that is generated using the sum up assets of the company It is an indicator on performance of the assets, whether they under playing or over performing. Asset perturbation Ratio = gross sales / Average Total Assets ? Interest Coverage Ratio The ratio tells us the amount of earnings that company holds to make sake payments of its debt.

Interest Coverage ratio = Income Before Interest and Income tax Expenses / Interest Expense ? Inventory Turn Ratio The ratio tells us how many times a business turns its inventory over a period of time. It indicates if the company has most of its assets tied up in inventory and if they are under performing. Inventory Turnover Ratio = Cost of Goods Sold / Average Inventories ? direct addition Margin Ratio The ratio tells us the operating efficiency of the company. The percentage of profit it makes after deduction of its operating expenses. Operating Profit Margin Ratio = Net Income Operating Expenses / Total Sales ? Quick Test Ratio Investors... If you want to get a full essay, order it on our website: Orderessay

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