What are the major types of financial ratios used to measure a
company's financial performance or...
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General Management
What are the major types of financial ratios used to measure acompany's financial performance or health? Discuss at least 5indicators/ratios and give examples in your discussion. The moreyou write and give examples, the more points you score
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1 Working Capital ratio This is defined as the ratio of a companys current assets to its current liabilities It shows that how easily can a company convert its current assets into cash to pay its short term loans Example A company having current assets of 4 Million and current liabilities of 2 Million will have a working capital ratio of 21 Which is considered as pretty attractive However if there is another company which has a working Capital ratio of 21 The more attractive company will be the one with more cash in the current assets The more working capital ratio the
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