Financial Ratio Analysis and Formulas



Financial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company’s financial statements. The level and historical trends of these ratios can be used to make inferences about a company’s financial condition, its operations and attractiveness as an investment.

Financial ratios are calculated from one or more pieces of information from a company’s financial statements. For example, the “gross margin” is the gross profit from operations divided by the total sales or revenues of a company, expressed in percentage terms. In isolation, a financial ratio is a useless piece of information. In context, however, a financial ratio can give a financial analyst an excellent picture of a company’s situation and the trends that are developing.

 

 

ratio 1 thumb Financial Ratio Analysis and Formulas

ratio2 thumb Financial Ratio Analysis and Formulas

ratio3 thumb Financial Ratio Analysis and Formulas

Share this tutorial:
  • Digg
  • del.icio.us
  • Facebook
  • Mixx
  • Google
  • Furl
  • Live
  • PlugIM
  • Reddit
  • Spurl
  • StumbleUpon
  • Technorati
  • TwitThis
  • YahooMyWeb
  • description
  • E-mail this story to a friend!
  • MisterWong
  • BlinkList
  • LinkedIn
  • MySpace
  • Print this article!
  • Yahoo! Buzz

1 Star2 Stars3 Stars4 Stars5 Stars (3 votes, average: 3.33 out of 5)
Loading ... Loading ...

About the Author

Adam has written 403 stories on this site.

Related Tutorials & Articles

Liquidity ratios
Liquidity ratios A liquidity ratio is a useful tool to determine the company short term financing position. The higher the value indicates company better liquidity position in other words company assets are valuable and can easily converted into cash.   Most common liquidity ratios are current ration quick ratio.   Current Ratio -                Current Assets/current Liabilities  The current ratio derives...Read more

One Comment on “Financial Ratio Analysis and Formulas”

  • Ali Asad wrote on 22 February, 2009, 12:13

    Hello, Your case study on toyota helped me alot.

    So i thought why don’t i share a free resource where e-books are indexed.

    The site is gigapedia.com Join it and use gigapedia as primary search engine on top right(not google or Yahoo).

    Download the books from the links page.

    This way you will be able to make more tutorials on different subjects.

    Regards and Much Thanks

Write a Comment

Gravatars are small images that can show your personality. You can get your gravatar for free today!

Copyright © 2010 Sooper Tutorials. All rights reserved. Powered by WordPress.org, Website by ISolution.org.