In this article we will discuss about the users of ratio analysis in accounting.
Ratio analysis of a firm’s financial statements is of interest to a number of parties, mainly, share-holders, creditors, debtors, firm’s own management etc. People in various walks of life are at present interested in ratio analysis though in different ways and fashion and each, however, from his own angle.
The type of ratio analysis, its nature and dimension differ from party to party according to their objectives of financial analysis. Different ratios are used to signify different trends in the working of the firm. However, the table given below would help the students to have a rough idea.
Parties interested and application of different ratios, in short, are given below:
