Financial Ratios
Ratio Analysis is a technique of comparing different financial ratios produced from a company's financial statements, ratio analysis is a technique used in financial analysis to assess a company's financial performance and health. These ratios offer important information about the profitability, liquidity, solvency, efficiency, and overall operational performance of a company. Ratio analysis is a tool used by financial analysts, creditors, investors, and management to examine a company's financial health and make educated decisions. Liquidity Ratio The ability of a business to satisfy its short-term financial obligations without seriously disrupting its operations is measured by liquidity ratios, which are financial indicators. These measures evaluate a company's liquidity, or its capacity to quickly turn assets into cash. The fast ratio (sometimes called the acid-test ratio) and the current ratio are the two most popular types of liquidity ratios. Types of Liquidity