Ratio analysis and its uses, Accounting Basics

Ratio Analysis: A 'Ratio' is  clear as an  arithmetical/quantitative/ numerical relationship between two numbers. Ratio analysis is a extremely significant and age old method of financial analysis.

Uses of Ratio Analysis:  There are a variety of uses of Ratio Analysis, some of which are like this:

1. It assists in managerial decision making

2. It assists in financial planning and forecasting

3. It assists in communicating the financial strength of a concern

4. It assists in control

5. It is a critical part of budgetary control and standard costing

6. It assists an investor/prospective investor in decision making

7.It offers information to the creditors concerning the solvency of the firm

8.It assists the employees by providing information about the profitability of the concern

9. It assists the government in policy making by provided that financial information about the industry/firm etc

10. It makes easy inter-firm, intra-firm, and firm industry contrast.

Posted Date: 10/15/2012 5:55:28 AM | Location : United States







Related Discussions:- Ratio analysis and its uses, Assignment Help, Ask Question on Ratio analysis and its uses, Get Answer, Expert's Help, Ratio analysis and its uses Discussions

Write discussion on Ratio analysis and its uses
Your posts are moderated
Related Questions
For earnings management, is impairment of goodwill easier to manipulate than impairment of PPE?

Q. Advantages of Weighted-average? Weighted-average: Advantages because of the averaging process the effects of year-end buying or not buying is lessened. Drawback Manipulation

Q. Describe about Net sales? Sales -- amounts received or due for services or goods sold to customers. Gross sales aretotal sales before any returns or adjustments. Net sales a

Birch issued 200 shares of $12 par common stock in exchange for a piece of equipment with a current market value of $3,000.Whichof the following is not part of the journal entry

Q. What do you mean by Aging? Aging -- a process where accounts receivable are sorted out by age (typically current, 30 to60 days old, 60 to 120 days old and so on.) Aging perm

Accounting conventions The phrase 'convention' is used to signify customs or ethnicity as a guide to the research of accounting statements. A variety of accounting conventions

After the closing entries are posted to the ledger, each revenue account will have a zero balance: a. a zero balance, b. a debit balance, c. a credit balance, or d. e

Q. Show the examples of long-term assets? Property, plant, and equipment are assets with helpful lives of more than one year a company acquires them for use in the business r

Distinctions between management and financial accounting We can observe that management accounting is less constrained than financial accounting. It may draw from a range of s

Q. Describe about chain discount? Occasionally the list price of a product is subject to several trade discounts this series of discounts is a chain discount. Chain discounts s