Financial ratios and interpretations Financial Ratios
One of the tools that are used to determine the company's financial position is financial ratios. In fact, financial ratios disclose important facts in connection with the operation and financial condition of a company. Benefit of ratios calculations is that the relationship between the major items of the financial statements will become accurate. In addition the problems, and financial strengths and weaknesses are determined. However, ratios make more sense that compared with that of in the past with in the same company or other companies or related industry preferred standards. Financial analysts use financial ratios to evaluate a company's financial condition. In short, financial statements should be analyzed to ensure the safety of the company's corporate finance. Noticeable result of the financial statements of the acquired company can be obtained using financial ratios.