Glory Financial Ratios And Their Interpretation
To interpret the numbers in these three reports it is essential for the reader to use financial ratios.
Financial ratios and their interpretation. Is it making a profit. Interpretation of Accounting Ratios. In a rating or stock analyst report you will find a myriad of ratios.
The purpose of financial ratios is to enhance ones understanding of a companys operations use of debt etc. Financial ratios relate or connect two amounts from a companys financial statements balance sheet income statement statement of cash flows etc. An activity ratio relates information on a companys ability to manage its resources that is its assets efficiently.
What are financial ratios. Are its assets sufficient to meet its liabilities. Analysis and Result The financial performance of INS Bank is measured using pearson correlation and kendalls correlation coefficient test.
Analysts typically screen through the companys financial statements such as the balance sheet and income statement to aggregate the numbers for efficiency ratio calculations. A financial leverage ratio provides information on the degree of a companys fixed financing obligations and its ability to satisfy these financing obligations. The more extensive the use of debt the larger the firms leverage ratios and more risk present in the firm.
The ratio gives them a guide for drawing conclusions. Table 1 showing financial ratios of financial statement of INS bank during the period 2013-14 to 2017-18. Financial ratios are the indicators of the financial performance of companies and there are different types of financial ratios which indicate the companys results its financial risks and its working efficiency like the liquidity ratio Asset Turnover Ratio Operating profitability ratios Business risk ratios financial risk ratio Stability ratios etc.
That of financial condition and balance sheet strength. Likewise banks also use various ratios to measure the financial health of a company. These ratios are calculated using numbers taken from a companys balance sheet profit loss ac and cash flow statements.