Financial Ratio Analysis diagram below presents key ratios used in the analysis of company’s financials. These financial ratios are mathematical comparisons of various components of the financial statements. These comparissons help investors and company management understand how well a business is doing overall and in relation to competitors.
What is Ratio Analysis? Ratio analysis is a mathematical approach in which various financial ratios of an organization are taken from the financial statements and are analysed to understand company’s financial and operational performance.