Question

Classification of ratios – profitability ratios, turnover ratios, liquidity ratios, turnover ratios; advantages of ratio analysis​

Answer 1

Answer:

1) Helps in analyzing financial statements

2) Helps in judging the efficiency

3) Helps in determining weakness

4) Helps in projected future earnings and cash flow

5) comparing performance to peer

6) Trend analysis

7) Ratio give meaning to absolute figures

8) Analysis of past resulting

9) Determining short term liquidity

10) Communication

Answer 2

Answer:

1) Helps in analyzing financial statements

2) Helps in judging the efficiency

3) Helps in determining weakness

4) Helps in projected future earnings and cash flow

5) comparing performance to peer

6) Trend analysis

7) Ratio give meaning to absolute figures

8) Analysis of past resulting

9) Determining short term liquidity

10) Communication