Financial ratios - the extent to which an organization is...

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Financial ratios: Financial ratios are indicators of an entity’s performance and situation. They can predict future trends, and are useful for comparison with other organizations. Liquidity ratios: Provide information about a firm’s ability to meet its short term obligations, or pay off its current liabilities in the event of demand for payment. Asset turnover ratios: Indicate the efficiency with which a firm is utilizing its resources. Leverage ratios: Provide an indication of a company’s long-run solvency position. They measure
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Unformatted text preview: the extent to which an organization is using long term debt. One particularly important ratio here is the debt-equity ratio, which debt total divided by total equity. Profitability ratios: They provide different measures of success of the company. The significant ones are Gross Profit margin (Gross Profit/Sales), ROA (Net Income/Total Assets), and ROE (Net Income/Equity)....
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This note was uploaded on 11/04/2011 for the course ECON 112 taught by Professor Mike during the Spring '11 term at Université de Liège.

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