Use of Financial Ratio Analysis to

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Financial ratio analysis is a tool in analyzing and measuring company performance using parameters of the company's financial health condition. For financial data, you can usually take it from existing financial reports such as balance sheets, profit and loss reports, cash flow reports and other reports. So this financial ratio is a method commonly used to carry out analysis by calculating the average value of the financial report and explaining the relationship between a certain amount and other amounts in the financial report.

Why do you have to use this financial ratio? This is so that the comparisons kuwait mobile number list made against the items in the financial statements can produce a logical comparison. By using certain measures that have been recognized as having certain benefits so that the results of the analysis are suitable for use as a guide for decision making. determine how well their company is performing to evaluate where the company can improve. For example, if a company has a low gross margin, managers can evaluate how to increase their gross margin.


To see if the company is a good investment. By comparing financial ratios between companies and between industries, investors can better determine the best investment. Types of Financial Ratio Analysis Finance Pictures Download Free Images on Unsplash After you know the meaning and benefits of financial ratios, you also need to know about several types of financial ratios that you can use to calculate a company's financial reports.