The Company Balance Sheet – Layout, Preparation, Analysis or Interpretation
The Company Balance Sheet is very much different from that of a Sole proprietor especially the liability side.
The presentation of this format will give a clearer picture.
Interpretation of Financial Statements
Ratios are tools used by individuals to conduct a quantitative analysis of information in a company’s financial statements. Ratios are calculated from current year numbers and are then compared with that of the previous years’, other companies, the industry or even the economy to judge the performance of the company. Ratio analysis is predominantly used by proponents of fundamental analysis.
Uses of Ratio:
- Ratios are used in preparing industrial averages
- It helps in comparison of business performance
- It can be used to analyze and interpret financial data.
Classification of Ratio:
Ratios are generally classified into four, these are:
- Profitability ratios
- Utilization of assets ratio
- Financial ratios
- Investment ratios
This is a ratio that is used to measure the profit earned by a business over a period of time in relationship to the capital to achieve that level of profit.
- The complete lesson note and evaluation questions for this topic
- The complete lessons for the subject and class (First Term, Second Term & Third Term)
- Media-rich, interactive and gamified content
- End-of-lesson objective questions with detailed explanations to force mastery of content
- Simulated termly preparatory exams
- Discussion boards on all lessons and subjects
- Guaranteed learning
- Win great prizes for topping the Hall of Fame