Financial Ratio Analysis
Financial Ratio Analysis is a method used to evaluate a business's financial health and performance by comparing various financial ratios calculated from its accounting principles-based financial statements, such as balance sheets, income statements, and cash flow statements. This analysis provides insights into liquidity, profitability, efficiency, solvency, and valuation metrics, enabling stakeholders to make informed decisions about the business's operations, investments, and credit risk exposure. Financial Ratio Analysis serves as a vital tool for investors, lenders, and management in assessing the overall financial position of a company and identifying areas that require improvement or strategic adjustments.