Understanding Financial Performance

This eBook explains how to use key accounting ratios to help you to make informed management decisions about the financial status of other organizations. It shows how these ratios can be derived from readily available financial statements

Using such ratios enables you to calculate whether a business is profitable or not. They also allow you to assess the investment potential and overall health of an organization.

Preface

This eBook explains how to use key financial ratios to help you make informed management decisions about the financial status of other organizations.

You will learn:

• How key ratios can be derived from readily available financial statements
• How to tell if a business is solvent by using the current ratio and the quick ratio
• How to tell if a business is profitable and to put any profit into perspective by looking at ratios that compare profit as a percentage of sales or assets
• How to look at individual parts of the business to gain insight into their individual profitability and efficiency
• How to assess the investment potential and overall health of an organization

Content

1. Interpreting Key Financial Ratios
2. Purpose and Types of Key Financial Ratios
3. Summary
4. References