Ratio Analysis

Published:

Analysis financial statements using ratio

1. 5 types of ratios

1. Profitability ratio:

  • Ability to generate profit

2. Activity ratio:

  • Efficiency in using assets to generate revenue

3. Liquidity ratio:

  • Ability to pay short-term debt

4. Solvency ratio:

  • Ability to pay long-term debt

5. Valuation ratio:

  • Investment in common equity