Financial Ratio Analysis
Financial Ration analysis is used to analyze the financial condition of a company or compare its financial health with other peer group companies. Financial Ratio can be used for the following cases
- To compare the financial health among peer companies
- To compare two companies from different industries
- To check the financial performance and compare with previous performance.
- To find out the investment opportunity or growth potential
- To select the most suitable company in a industry for investment purpose.
Financial Ratio can be classified in different based on different financial aspects of the company. They are mainly
- Liquidity Ratios
- Profitability ratios
- Solvency Ratios
- Activity ratios
- Payout Ratios
- Valuation Ratios