The top accounting ratios shown in the below diagram help with the financial analysis. The top ratios is Debt-to-Equity Ratio.
The financial reports that accounting ratios show company’s performance, and help predict it is future.
Accounting Ratios – Financial Accounting Ratios – Accounting Ratio Analysis – List of Accounting Ratios including profit margin, gross margin, asset turnover ratio, current ratio, quick ratio and other key accounting ratios.
Financial accounting ratios help analyze company’s performance in any given year and through out the years. Balance sheet shows the financial position of a company at a given point in time. Income statement shows financial performance through a given time period, e.g. a year. Cashflow statement depicts the flow of cash through a given time period. Accounting ratios help connect the statements together and make sense of what is happening with the business.