Literature review on ratio analysis. Ratio Analysis on Literature of Review 2022-10-18
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A literature review on ratio analysis is a survey of the existing research on the use of financial ratios to evaluate the financial performance and stability of a company. Ratio analysis is a common tool used by investors, analysts, and managers to assess the financial health of a company and make informed decisions about its future prospects.
There are various financial ratios that can be used in ratio analysis, including liquidity ratios, solvency ratios, profitability ratios, and efficiency ratios. Liquidity ratios measure a company's ability to meet its short-term financial obligations, such as the current ratio and the quick ratio. Solvency ratios, on the other hand, measure a company's ability to meet its long-term financial obligations, such as the debt-to-equity ratio and the interest coverage ratio. Profitability ratios measure a company's ability to generate profits, such as the return on assets and the return on equity. Efficiency ratios measure a company's ability to use its resources efficiently, such as the asset turnover ratio and the inventory turnover ratio.
There have been numerous studies on the use of financial ratios in ratio analysis. One study found that liquidity ratios are important indicators of a company's financial health, as they measure a company's ability to pay its short-term debts. Another study found that solvency ratios, such as the debt-to-equity ratio, can be used to assess a company's financial stability and risk of bankruptcy. Profitability ratios, such as the return on assets and the return on equity, have also been shown to be important indicators of a company's financial performance.
However, it is important to note that financial ratios should not be used in isolation, as they may provide conflicting or misleading information. It is recommended to use a combination of financial ratios and other financial analysis techniques, such as trend analysis and common-size financial statements, to get a more comprehensive understanding of a company's financial health.
In conclusion, ratio analysis is a valuable tool for evaluating a company's financial performance and stability. However, it is important to use a variety of financial ratios and consider other financial analysis techniques to get a complete picture of a company's financial health.
Review Of Literature Of Ratio Analysis [od4pjm9m594p]
They used various ratios under the segments liquidity, profitability, activity, solvency, marketability and growth. The study covered a period of six years ranging from 2006-07 to 2011-12. We use information technology and tools to increase productivity and facilitate new forms of scholarship. In a case study of ICICI bank, Gupta 2014 aimed to analyze and compare the Financial Performance of ICICI Bank for a period from 2009-10 to 2013-14. Page 38 of the Annual Financial Report shows these figures along with many other figures. A sample of five large companies was selected for the study.
Literature review of ratio analysis by Fisher Shawna
Information derived from financial statements is used to calculate most ratios and make projections. Profitability ratios are a class of measurement employed in assessing the ability of a business organisation to generate earnings relative to its expenses Goel, 2015. Strategic management Ratio Analysis- Literature 4. Whereas net profit means the amount arriving after deducting all the expenses which includes taxes also. . Various financial ratios like gross profit ratio, net profit ratio, operating ratio, dividend payout ratio, turnover ratio etc were used for financial analysis. Results of the study confirmed that through proper working capital management, the company can increase its profitability.
Literature review on ratio analysis by Martin Maggie
The study revealed that liquidity ratios measure by current ratio CR , Liquid ratio LR and Cash Turnover Ratio, CATAR, CLTAR had a diminutive relationship with profitability measured by return on capital employed ROA and ROI. To do so, we create a conceptual framework that maps the influence of regulators, public Financial Performance Review and Objective While ratios are easy to compute, which in part explains their wide appeal, their interpretation is problematic, especially when two or more ratios provide conflicting signals. As accounting ratio is an expression relating two figures or accounts or two sets of account heads or group contain in the financial statements. I proudly utilize the privilege to express my hearty thanks to Principal, Dr. It is therefore, not surprising that ratio analysis feature are prominently in the literature on financial management. ORIGINS The primary cause of the evolution of ratio analysis in general was Euclid's rigorous analysis of the properties of ratios in Book V of his Elements in about 300 B. Horrigan T e ~utility of accounting data seems to be assumed axiomatically by most accountants, but it is interest- ing to trace how accounting data have actually been used.
Thus, a history of the development of ratio analysis is at the same time a fairly accurate descrip- tion of its present practice. We use both approaches to characterize and to compare the financial structures of Indian companies over time; between quoted and unquoted companies; and between companies which belong to a business group and those that do not. The figures acquire adequate support from the management provided that the data cites credible and the right references. Result of the study indicated that pharmaceutical firms followed conservative investment and financing policies during study period. In addition to that, the study assessed and predicted the future performance of these companies. Correlation and regression analysis were used in the empirical analysis.
A Training of the Register No: 098001123108 for Summer Internship Fourth Trimester of MASTER OF BUSINESS ADMINISTRATION during August - 2010. Ratio analysis is used to compare certain data within the financial statements to assess liquidity, solvency, profitability. What the ratio does is that they reveal the relationship in a more meaningful way so as to enable equity investors; management and lenders make better investment and credit decisions. The study covered a period of fourteen years from 1998- 99 to 2011-12. The data was analyzed with the help regression analysis to find out the impact of liquidity on profitability, Correlation analysis was used to find out the relationship between liquidity with profitability. Ratio comparisons can be used to compare the financial performance of time periods within the same organization or to compare the performance of different organizations. The results of all financial ratios, together with the prevailing situation of over competition, inelasticity of construction costs and reduced aggregate demand in Malaysia, revealed the extreme difficulty of reversing the financial performance in the coming years.
Review of literature on ratio analysis by Smith Evelyn
Its appropriate use will go toward giving a true picture of the financial health of the unit. Finally, the researchers concluded that Maruti Suzuki had better strategic position in comparison to its competitors. Only with the help of ratios the financial statements are meaningful. Twelve manufacturing companies were selected for the study which had involved in the process of merger during 2000-2009. This relationship can be expressed as i percentages, say, net profits are 25percent of sales assuming net profits of Rs 25,000 and sales of Rs.
Literature review of ratio and financial statement analysis Free Essays
Statement of research problem and methodological approach 5. School of Management BONAFIDE CERTIFICATE This is a bonafide certified of practical record work done by Mr. I am not asking for you to do my work. Medhat, 2006 used multiple regression analysis and correlations to test the financial performance of Omani Commercial banks. A STUDY ON FINANCIAL PERFORMANCE USING RATIO.
Ratio literature opportunities.alumdev.columbia.edu
This method will be used to measure the profitability, liquidity and efficiency of Tesco and analyse the performance of the business. A survey by the Home Office 2015 have found that in 2014, 16. It has assumed that drug Evidence Based Practice Proposal : Literature Support Evidence-Based Practice Proposal: Literature Support The literature review studies discuss the recurrent issue of higher and lower staffing ratios and how they affect patient outcomes. FCC, being the second largest company by assets, showed higher sales, higher profit before tax and higher return on asset during five years 2006-2010. Ratio is express by dividing one figure by the other related figure.