Ratio analysis and its uses, Accounting Basics

Assignment Help:

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.


Related Discussions:- Ratio analysis and its uses

A store receives $400 cash after offering a chain discount, A store receive...

A store receives $400 cash after offering a chain discount of 10/10/5 on a good. What was the list price? A. $492.20 B. $519.82 C. $533.33 D. $612.00

The formula for computing additional paid-in capital, The formula for compu...

The formula for computing additional paid-in capital in excess of par is shares of stock times Saturday

Show purchase returns and allowances account, Q. Show Purchase Returns and ...

Q. Show Purchase Returns and Allowances account? Both allowances and returns reduce the buyer's debt to the seller and decrease the cost of the goods purchased. The buyer may d

What is prepaid rent explain with example, Q. What is Prepaid rent explain ...

Q. What is Prepaid rent explain with example? Prepaid rent Prepaid rent is another instance of the gradual consumption of a previously recorded asset. Suppose a company pays re

Use the following information to answer questions, The Bayside Company uses...

The Bayside Company uses the LIFO cost flow method to value inventory. In the current year, profit at Bayside is running unusually high. The corporate tax rate is also high this ye

Cash flow statement and accounting information systems, 1. My accountant ha...

1. My accountant has told me that my business made a profit of £100,000 last year. However over the same time period my bank balance has decreased and not increased as I expected.

Transponder, A user buys a new transponder for $20. What debit and credit e...

A user buys a new transponder for $20. What debit and credit entries would need to be made?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd