3.6 Ratio analysis
Ratio Analysis is a management tool for analysing and judging the financial performance of a business. Financial ratios are made using the financial accounts (P&L & Balance Sheet).
Profitability ratios - GPM & NPM
Liquidity ratios - Current ratio & Acid test (or quick) ratio.
Efficiency ratios - Stock turnover ratio, ROCE, Debtor days ratio & Creditor days ratio.
Shareholder ratios - Earnings per share & Dividend yield.
Profitability ratios - GPM & NPM
Liquidity ratios - Current ratio & Acid test (or quick) ratio.
Efficiency ratios - Stock turnover ratio, ROCE, Debtor days ratio & Creditor days ratio.
Shareholder ratios - Earnings per share & Dividend yield.