{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Class2&3 - Part3

Class2&3 - Part3 - Accounting Review Part 2 Ratio...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Accounting Review - Part 2 Ratio Analysis • Financial ratios help the firm, its creditors and investors to investigate the firm’s financial health • Ratios allow for better comparison through time or between companies • They should always be considered in comparison to peer companies and industry averages Who uses Financial Ratios? • Internal users – Performance evaluation – compensation and comparison between divisions – Planning for the future – guide in estimating future cash flows • External users – Creditors – Suppliers – Customers – Stockholders Benchmarking • Ratios are not very helpful by themselves; so they need to be compared to something • Time-Trend Analysis – Used to see how the firm’s performance is changing through time – Internal and external uses • Peer Group Analysis – Compare to similar companies or within industries – SIC and NAICS codes Common Financial Ratios • Short-term solvency or liquidity ratios...
View Full Document

{[ snackBarMessage ]}

Page1 / 16

Class2&3 - Part3 - Accounting Review Part 2 Ratio...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online