Understanding Ratio Analysis and Its Application
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Ratio analysis and its application
A number of students face problems with this topic of ratio analysis and its application. This might be because the students are not clear about this. Ratio analysis is nothing but a tool which is used to determine the operational efficiency and financial health of a company.
To compare similar variables, the ratio application which is ratio analysis, is used. Ratio analysis is used by the companiesin the following ways.
Investors use ratio analysis by assessment of long-term solvency and assessment of liquidity.
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