Ratio Analysis Ratio analysis is basically used to understanding the financial health of a business entity. With the help of ratios we can easily calculate from current year performance of the companies and are then compared to previous years. Ratio analysis conducts a quantitative analysis of information in a company’s financial statements. These Ratios are most commonly used in banking sector can be divided into five main categories Liquidity Ratios Leverage Ratios Profitability Ratios Activity Ratios Market Ratios A) Liquidity Ratios Liquidity Ratios are used to determine a company's ability to meet its short terms obligations. These include; 1) Current Ratio 2) Acid Test Ratio 3) Working capital shared by Muhammad Rizwan vubest.blogspot.com Current Ratio What Does Current Ratio Mean? A liquidity ratio that measures a company's ability to pay short-term obligations. Also known as "liquidity ratio", "cash asset ratio" and "...
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