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
beginning inventory,purchase,and sales data for commodity A are as follows november 1 inventory 1500units @k20.00 2 sold 5000unit @ 40.00 12 purchase 10000 units @22

Government: In a mixed economy this is seems to be the duty of the Government to direct the operation of the economic system in that a way which it subseries the general good. Con

Q. Define the accounting process ? The accounting process offers financial data for a broad range of individuals whose objectives in studying the data vary widely. Bank officia

HOW TO DO DOUBLE ENTRY QUESTIONS

Q. Explain about full disclosure principle? The full disclosure principle states that information significant enough to influence the decisions of an informed user of the finan

Q. What is periodic inventory procedure? In the periodic inventory procedure the Merchandise Inventory account is updated periodically subsequent to a physical count has been m

Q. Financial reporting about the economic resources? The third financial reporting should provide information about the economic resources of an enterprise the claims to those

An asset's cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use. 01.) True 02.) False True or Fals

Q. Cash collection as point of revenue recognition? Several small companies record revenues and expenses at the time of cash collection and payment which may not take place at

OBJECTIVES OF FINANCIAL STATEMENT ANALYSIS Financial Statements are analyzed by dissimilar users for dissimilar purposes. Some of the purposes are as under- 1. To recognize