What are the major types of financial ratios used to measure a company's financial performance or...

70.2K

Verified Solution

Question

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

Answer & Explanation Solved by verified expert

4.4 Ratings (901 Votes)

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 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member