What Is The Usefulness Of Ratio Analysis?
Ratio analysis is done by taking the information from the financial statements of a company. Ration analysis is the most important component of the analysis of a company. It can give a simple and clear understanding to the various financial aspects of the company like turnover ratio can give an idea about the sales made by the company. Ratio analysis also give an appropriate way to compare different companies in the same industry and also to compare the current result of the company from the historical results. Moreover, ratio analysis give an organized picture of what is happening in the company like gross profit ratio and income profit ratio highlight various aspects of profitability of the company.
