Financial ratios are the amongst most imperative and common tools used by investors to analyze a business’ financial standing, and determine whether it is profitable to invest in the company. Furthermore, financial ratios are mathematical comparisons of financial statements; which can help both internal and external users understand a business’s performance for future improvements or predicting how the business will thrive in the future.
Compare publicly traded companies stock prices with other financial measures like earnings and dividend rates to figure out a stock’s current and future market value.
Analyze the company's ability to pay of both current and long term liabilities as they come due
Compare a company’s income statement accounts and analyze its ability to generate profits from it’s operation
