In this chapter, we introduce the most commonly used ratios, classified according to four broad categories that are fairly standardized; in particular, we can organize a firm's financial statement information into ratios to examine the firm's profitability, liquidity, operating efficiency, and financial leverage. We start by analyzing the way these ratios are built and how they should be interpreted. Next, we consider some other ratios, based on market data. Finally, we discuss how to realize a comprehensive financial analysis of a firm using these ratios.
Keywords: corporate finance; working capital management; financial needs for operation; financial analysis; financial ratios; financial forecasting
Chapter. 6675 words. Illustrated.
Subjects: Financial Markets
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