University of Phoenix Wk 1 Financial Ratios Discussion

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Favpxyr

Business Finance

University of Phoenix

Description

Respond to the following in a minimum of 175 words:

Financial statement analysis focuses primarily on isolating information that is useful for making a particular decision. Through ratio analysis, users of financial data can analyze various relationships between items reported. Describe the 3 main categories of ratios and provide a specific example of a ratio that is used in each category. For each of the 3 ratios you selected, describe how it is used in managerial decision-making.

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Explanation & Answer

Attached.

Running head: FINANCIAL RATIOS

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Financial Ratios
Student Name
Institution Affiliation

FINANCIAL RATIOS

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Financial Ratios
The main categories of financial ratios used to analyze financial statements are liquidity
ratios, leverage ratios, and profitability ratios. Profitability ratios show the balance between what
a company spends on expenses and what it earns from revenues. Hence, they help financial
managers to tell which bus...

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