(Using
Ratio Analysis, Common Size Analysis & Percent Change analysis)
Financial ratios are useful gauges of a firm's performance and
financial situation. Ratios can be calculated from the information provided by
the firm’s financial statements. Financial ratios can be used to analyze trends
and to compare the firm's financials to those of other firms. According to Wikipedia, financial ratio is a relative magnitude of two selected
numerical values taken from a firm's financial statements. There are many standard
ratios used to try to evaluate the overall financial condition of an
organization. Financial ratios may be used by managers within a firm, by
current and potential shareholders (owners) of a firm, and by a firm's creditors.
Financial analysts use financial ratios to
compare the strengths and weaknesses between intra and Inter Company.