Stakeholders want to determine if an organization is performing successfully to meet its financial objectives. The tool most stakeholders use is referred to as ratio analysis. Financial ratios refer to the numerical or quantitative relationship between 2 items or variables. Ratio analysis can provide an early warning of a potential improvement or deterioration in a company’s financial situation or performance.At the conclusion of the module, participants will be able to:
- Utilize ratio analysis.
- State the benefits and limitations of ratio analysis.