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.

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...
