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Equivalent ratios are ratios that represent different numbers but the relationship between the numbers is same.
This is because the average of the ratios does not take account of the sizes of the numbers in the ratios.
you use a scientific calculate
ratios r comperisons between 2 numbers
liquidity ratios
Investors and financial analysts wanting to evaluate the operating efficiency of a firm's managers would probably look primarily at the firm's Asset Utilization Ratios.
Describe the four approaches to using financial ratios?
financial ratios
Steps in 'Ratio Analysis'Step 1: Collection of information, which are relevant from the financial statements and then to calculate different ratios accordingly.Step 2: Comparison of computed ratios with the past ratios of the same organisation or with the industry ratios.Step 3: Interpretation, drawing of inferences and report-writingClassification of Ratios
There are many different financial ratios used as the indicators and they are differently use based on the purpose of what areas, or risks that the appraiser concern about. Financial Ratios are the useful tool to measure that company performance financially; however, the Key Financial Performance Indicators turn to be less popular or they can not use alone to measure how success the entity is. We will talk in detail below why Financial Ratios is less popular in the Current Strategic Performance Appraisal. financial-ratios.info
Ratios are used in accounting to provide a comparative analysis of financial data. They allow for easy interpretation and comparison of numbers across different time periods or between companies. Ratios also help identify trends, assess financial health, and identify areas of strength or weakness within a company. Overall, ratios provide a simplified way of conveying complex financial information.
Equivalent ratios are ratios that represent different numbers but the relationship between the numbers is same.
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This is because the average of the ratios does not take account of the sizes of the numbers in the ratios.
In financial analysis the analyst compute financial ratios to determine the financial health of an financial institutoin rather than simply studying raw financial data.
A financial ratio is a relative magnitude of two selected numerical values taken from a Company's Financial Statements. There are many standard ratios that can be used to evaluate the overall financial condition of a company. Financial ratios can be used by managers of a firm or shareholders (both current and potential) or banks or anyone else to gauge the financial strength of the company. They can be used also to compare the strengths and weaknesses of two or more organizations.For Ex: If I were to buy a banking stock from the Indian stock market, I can compare the financial ratios of a few of the country's leading banks like ICICI, HDFC, SBI etc and then choose the one which I feel has the most impressive financial background and strengths.