Financial Statements Analysis

Financial Statements Analysis

Liquidity

Activity

Profitability

Financial leverage

Others

Working capital

acid test ratio

current ratio

Effect of the inventory cost flow assumption on working capital

Turnover on all current assets

Number of days' sales in inventory and accounts receivable

ROE

ROI

P/E ratio

Dividends ratio and dividend payout ratio

Important when buying shares or investing

Use liabilities in your favor

Interest rates below return on investment

LEVERAGE

Common size financial statements

Very useful to several years analysis

Every ratio is very important to analyze. One compliments the other to make absolute correct conclusions on a company or firm before investing in it.