1. Introduction “One of the most fundamental facts about businesses is that the operating performance of the firm shapes its financial structure. It is also true that the financial situation of the firm can also determine its operating performance”(Zender, 2006).To know this for certain first of all is to adequately satisfy reporting standards and presentation procedures, and adhere to all regulations concerning financial reporting and auditing standards. This makes financial statements and reports very important diagnostic tools when it comes to financial planning and forecasting. The general belief that signs of financial crisis and difficulties can be observed years before occurrence is solidified when businesses can build financial models to evaluate risks and extract knowledge about their company‟s murky future (Lin, Liang, & Chen, 2011). Performance of companies financially can be ascertained through financial ratios. It enables companies to determine their financial strength or frailties. It also enables them to assess their risks and opportunities. Aside being able to make accurate predictions, ratios can provide the current position of the firm. Investors, banks and borrowers rely on ratios to assess the profitability and viability of dealing with a particular firm. Industrial analysis are done by aggregating financial statements of all the industry players for decision making by regulatory authorities. When it comes to managers deciding whether to shut down or continue operating a particular section of their business, ratios always provide the needed analysis for rational decision making.