Financial ratio analysis
A FIN3403 Reading
Prepared by Pamela Peterson-Drake
O U T L I N E
1.
Introduction
2.
Liquidity ratios
3.
Profitability ratios and activity ratios
4.
Financial leverage ratios
5.
Shareholder ratios
1.
Introduction
Financial...
More
Financial ratio analysis
A FIN3403 Reading
Prepared by Pamela Peterson-Drake
O U T L I N E
1.
Introduction
2.
Liquidity ratios
3.
Profitability ratios and activity ratios
4.
Financial leverage ratios
5.
Shareholder ratios
1.
Introduction
Financial Analysis
As a manager, you may want to reward employees based on their performance.
How do you know
how well they have done? How can you determine what departments or divisions have performed
well? As a lender, how do decide the borrower will be able to pay back as promised? As a manager of
a corporation how do you know when existing capacity will be exceeded and enlarged capacity will be
needed? As an investor, how do you predict how well the securities of one firm will perform relative
to that of another? How can you tell whether one security is riskier than another? All of these
questions can be addressed through financial analysis.
Financial analysis is the selection, evaluation, and interpretation of financial data, along with ot
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