Question

Interpred four ratio based on profile and loss account

Answer 1

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Analyzing and interpreting financial ratios is logical when you stop to think about what the numbers tell you. When it comes to debt, a company is financially stronger when there is less debt and more assets. Thus a ratio less than one is stronger than a ratio of 5.

In general, financial ratios can be broken down into four main categories—1) profitability or return on investment; 2) liquidity; 3) leverage, and 4) operating or efficiency—with several specific ratio calculations prescribed within each.

How to Interpret your profit and loss statements-

• Revenue
• COGs
• Gross Profit
• Selling, General and Administrative Expenses
• Earnings Before Interest and Tax
• Earnings Before Interest, Tax, Depreciation, and Amortization
• Net Earnings

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Answer 2

Answer:

${\huge{\mathbb{\purple{ANSWER}}}}$

Analyzing and interpreting financial ratios is logical when you stop to think about what the numbers tell you. When it comes to debt, a company is financially stronger when there is less debt and more assets. Thus a ratio less than one is stronger than a ratio of 5.

In general, financial ratios can be broken down into four main categories—1) profitability or return on investment; 2) liquidity; 3) leverage, and 4) operating or efficiency—with several specific ratio calculations prescribed within each.

How to Interpret your profit and loss statements-

• Revenue
• COGs
• Gross Profit
• Selling, General and Administrative Expenses
• Earnings Before Interest and Tax
• Earnings Before Interest, Tax, Depreciation, and Amortization
• Net Earnings

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