The Financial Ratios

The financial ratios are tool used by creditors, investors, stakeholders and management of a company to assess the past, present and future situations of an organization by making use of different financial figures and data through a company’s financial statements. The financial ratio helps to depict a clear picture of financial standing of any organization as the result it gives are compared with the industry average results. Broadly financial ratios are of five types; profitability ratios, asset usage ratios, efficiency ratios, working capital ratios and liquidity ratios.

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