The financial ratio is an expression of the relationship between the numbers
on financial statements to be more meaningful. Mathematically, the financial ratios are not more than the ratio in which the numerator and the denominator is taken from thefinancial data on the financial statements (Keown et.al, 2008).
Usefulness of Financial Ratios
Financial ratios designed to help us evaluate a financial statement,
in order to identify some weaknesses and the company's financial
strength (Brigham & Houston, 2006).
Meanwhile, according toKeown et.al (2008) Financial ratios provide two ways how to make a comparison of financial data company, which means:
The purpose of the use of a ratio when analyzing the information to be analyzed for the ratio of two different companies can becompared or even a company with
the boundaries of different times.
on financial statements to be more meaningful. Mathematically, the financial ratios are not more than the ratio in which the numerator and the denominator is taken from thefinancial data on the financial statements (Keown et.al, 2008).
Usefulness of Financial Ratios
Financial ratios designed to help us evaluate a financial statement,
in order to identify some weaknesses and the company's financial
strength (Brigham & Houston, 2006).
Meanwhile, according toKeown et.al (2008) Financial ratios provide two ways how to make a comparison of financial data company, which means:
- We can examine the ratio between the time to examine thedirection of movement.
- We can compare the ratio of companies with ratios of othercompanies.
The purpose of the use of a ratio when analyzing the information to be analyzed for the ratio of two different companies can becompared or even a company with
the boundaries of different times.
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