Financial statement analysis | Ratio Analysis | FIN-Ed

#fin-ed
Financial statement analysis | Ratio Analysis | FIN-Ed
The financial statements convey a lot of useful information that helps corporate managers, creditors, and outsiders like potential investors assess the company’s strengths and weaknesses and gauge the expected impact of various proposals. In a previous video, I already discussed the most authentic source where can obtain financial statements for any public company from. Just in case, the link to that video is in the description below.

Financial statements supply you with an overwhelming amount of information. Thus, you need to know some analysis techniques to make the information meaningful and make a quick evaluation of a company or across the companies.

Ratios help us evaluate financial statements. You can calculate many ratios using financial statement data. I am not going to discuss all these ratios individually. I would rather talk about the main categories that these ratios fall under.

Ratios are divided into five categories:
Liquidity Ratios
Asset management ratios
Debt management ratios
Profitability Ratios
Market value ratios