1. Ratio analysis
BBA-II
Sharda university

2. Analysis & interpretation of
financial statement

3. Analysis & interpretation of
financial statement
• analysis & interpretation of statement
help business owners & others interested
people to analyze the data with better
information about such key factors for
decision making & ultimate business
survival

4. Financial analysis
• Assessment of the
firm’s past,
present and future
financial
performance.

5. Ratio
• Ratio:- a ratio is a simple
arithmetical expression of
relationship of one number to
another or,
• An expression of quantitative
relationship between two
numbers.

6. Ratio analysis
• Ratio analysis is a tool of financial
analysis, it is used as devices to
analyze & interpret the financial
health of enterprise.
Ratio analysis means better
understanding of financial
strength & weakness of a firm.

7. Use/significance of ratio analysis
• Helpful in analysis of financial
strength
• Helpful in decision-making
• Help in financial forecasting
• Help in financial planning

8. Types of Ratio
• 1. Liquidity ratio:- current ratio, liquid
ratio
• 2. Solvency ratio: debt equity ratio, assets
to debt ratio, proprietary ratio.
• 3. Profitability ratio: gross profit ratio, net
profit ratio, operating ratio, ROI
• 4. Activity ratio: Inventory turnover ratio,
debtors turnover ratio, creditors turnover
ratio, working capital ratio