Objective of Ratio Analysis
 |
| Objective of Ratio Analysis |
1. To allow comparisons
to be made which assist in predicting the future.
2. To investigate the reasons for changes.
3. To construct a simple explanation
of a complicated financial statement by its expression in one figure.
4. To permit the charting
of a firm’s history and the evaluation of its present position.
5. To provide indicators
of a firm’s past performance in term of its operational activity and
profitability; and near-present financial condition.
6. To see what information
user can get from the accounting system output.
0 Comments