What is Ratio Analysis? - Accounts and Finance for Managers

The ratio analysis is an one of the important tools of financial statement analysis to study the financial stature of the business fleeces, corporate houses and so on. How the ratios are able to facilitate to study the financial status of the enterprise ?

What is meant by ratio?

The ratio illustrates the relationship between the two related variables

What is meant by the accounting ratio?
The accounting ratios are computed on the basis available accounting information extracted from the financial statements which are not in a position to reveal the status of the enterprise.
The accounting ratios are applied to study the relationship between the quantitative information available and to take decision on the financial performance of the firm.

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