Archive | Financial Analysis

Classification of Ratios | Accounting

In this article we will discuss about the classification of ratios in accounting. The accounting ratios may be classified on the following bases leading to somewhat overlapping categories: (A) Classification by Statements: The Traditional classification is based on those statements from which information is obtained for calculating the ratios. The ratios are classified as follows: (B) Classification by Users: This [...]

By |2017-02-06T20:58:56+00:00February 6, 2017|Financial Analysis|Comments Off on Classification of Ratios | Accounting

Tools of Financial Analysis | Company

In this article we will discuss about the three important tools of financial analysis. 1. Comparative Financial Statement: The preparation of comparative financial and operating statement is an important device of horizontal financial analysis. As their very name suggests, comparative financial statements are statements of the financial position of a business so designed as to provide time perspective to the [...]

By |2017-02-06T20:58:56+00:00February 6, 2017|Financial Analysis|Comments Off on Tools of Financial Analysis | Company

Balance Sheet and Revenue Statement Ratios

This article throws light upon the top two types of balance sheet and revenue statements ratios. The types are: 1. Turnover or Velocity Ratios 2. Profitability Ratios. Type # 1. Turnover or Velocity Ratios: (a) Stock/Inventory-Turnover Ratio: This ratio shows the relationship between inventory at close of the business and the overall turnover. In other words, it indicates the number [...]

By |2016-06-18T06:57:30+00:00June 18, 2016|Financial Analysis|Comments Off on Balance Sheet and Revenue Statement Ratios
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