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Steps involved in ratio analysis
The following are the four steps involved in the ratio analysis:
1) selection of relevant data from the financial statement depending upon the objective of the analysis
2) calculation of appropriate ratios from the above data
3) Comparison of the calculation ratio with the ratios of the same firm in the past or the ratios developed from projected financial statement or the ratios of some other firms or the comparison with ratio of the industry to which the firm belongs.
4) Interpretation of the ratios.
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A company manufactures a one product. Estimated cost data regarding this product and other information for the product and the company are as follows: Sales price per unit Rs.2000
how to journalize entry. purchased $150,000 of raw materials on account, terms of 2/20; n/30
monetaryor non monetary which will arise as aresult of implemenntinng the project
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