In this article we will discuss about the classification of ratios in accounting. The accounting ratios may be classified on the following bases leading to somewhat overlapping categories: (A) Classification by Statements: The Traditional classification is based on those statements from which information is obtained for calculating the ratios. The ratios are classified as follows: (B) Classification by Users: This [...]
In this article we will discuss about the three important tools of financial analysis. 1. Comparative Financial Statement: The preparation of comparative financial and operating statement is an important device of horizontal financial analysis. As their very name suggests, comparative financial statements are statements of the financial position of a business so designed as to provide time perspective to the [...]
An analyst irrespective of his cast and creed has; however, to bear in mind that, interpretation of Financial Statements of a firm with the help of ratios becomes significant and meaningful when the same is accomplished in the backdrop of some established Standard in this regard. This Standard depends upon the own experience of the analyst or may be had [...]