Financial Ratio Analysis of Financial Statements

Abstract

Through analysis of financial report components and the values of the three types of financial ratios used— liability ratios, activity ratios, and profitability ratios—the research seeks to ascertain the company's level of short-term liquidity, its long-term financial performance, and its capacity to turn a profit from its production activities. Financial ratio analysis is a method for analyzing a company's financial status and may be used to make decisions. Investors, lenders, consumers, firm personnel, and even the government use financial ratio analysis. Through analysis of financial report components and the values of the three types of financial ratios used— liability ratios, activity ratios, and profitability ratios—the research seeks to ascertain the company's level of short-term liquidity, its long-term financial performance, and its capacity to turn a profit from its production activities. Financial ratio analysis is a method for analyzing a company's financial status and may be used to make decisions. Investors, lenders, consumers, firm personnel, and even the government use financial ratio analysis.