Ratio analysis compares the line-item data in a firm's financial statements, which will reveal many understandings regarding liquidity, profitability, operational efficiency, and solvency. Moreover, ratio analysis can be used to look at trends for one or more firms within the same industry or sector. Ratio analysis compares line-item data.
Respond to the following in a minimum of 175 words:
- List the 3 categories of ratios and explain how they could be used to help a firm.
- What are the most important ratios from the 3 categories and why?
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
1 response - (175 words)
2 replies to classmates - (150 words each) ** replies are attached**
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