LINKING RATIOS

liquidity Ratios Asset efficiency Ratios

size of CASH speed of CASH

STEPS TO THINK ABOUT WHEN REFORMING

FINANCIAL STATEMENT ANALYsis

Step 1 :
Analyse ratios against benchmarks

a .
"This ratiotell us
:

or
number of $top line for every $1 of bottom line
the number
"
of times ,
on
average We
, ...

6 .
All other things being equal
the bigger this Cor
rato , the better worse) because the more
Cor less) the
key word
key word
liquidity Cush (size of
pool)
consversion)
-

Cash Efficiency Cash (speed of

Structure
Capital Rish]
profitability Efficien

2 Thus A is better of them B because Cuse figures (

Step 2 links between Nations and ratio categories
Step 3 limitations
Step 4 Conclusion