Financial Ratios

Monitoring a company’s performance using ratio analysis and comparing those measures to industry benchmarks often leads to improvements in company performance. Not to mention these ratios are often part of loan covenants. The following article provides an overview of the 5 categories of financial ratios and links to their description and calculation.

Use the following Financial Ratios to measure financial performance against standards. In addition, analysts compare these ratios to industry averages (benchmarking), industry standards or rules of thumbs and against internal trends (trends analysis). Furthermore, the most useful comparison when performing financial ratio analysis is trend analysis. They are derived from the three following financial statements:

5 Categories of Financial Ratios

The five (5) major categories in the financial ratios list include the following :

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5 Categories of Financial Ratios

5 Categories of Financial Ratios

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7 Responses to Financial Ratios

  1. Anonymous February 12, 2010 at 11:35 pm #

    Hello everyone! I don't know where to start but hope this place will be useful for me.
    Hope to receive any assistance from you if I will have some quesitons.
    Thanks and good luck everyone! 😉

  2. Anonymous February 15, 2010 at 2:31 pm #

    Thanks after sharing. Like always, on the well-to-do and right-minded on quarry!

  3. Anonymous February 15, 2010 at 3:45 pm #

    Thanks for sharing. Like often, on the in money and right on quarry!

  4. Umair Wasi April 5, 2019 at 5:13 am #

    Nice article, cover almost everything relating to Financial Statement Analysis or Ratio Analysis, a very strong part in accounting to obtain the firm’s financials activity

  5. Abebe Legassu January 22, 2020 at 3:00 pm #

    Thank you for sharing

    • Allie Wilson January 24, 2020 at 2:22 pm #

      You’re welcome, Abebe! Please let us know if you need anything in the future.

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