What is Financial ratio?

1. Understanding financial ratios

The ratio finance can describe a chain and can be obtained at the same time the existence of a balance between a certain amount by the number of others.

In fact, the ratio is composed of finance financial in great numbers because it is generally known that financial ratios were made in accordance with the interests and targets will be achieved in the process of analysis.

2. The types of financial ratios 

The data source based on financial ratios, as follows:

1. Ratio-the ratio of the balance sheet (balance sheet ratio) consists of: current ratio, is test ratio, current liabilities to total assets ratio, and so on.
2. The ratio-the ratio of profit and loss reports profit companies (income statement ratios) consists of gross profit margin, net margin operation, operating ratio and so on.
3. a ratio-the ratio between the reports (inter – statement ratios) consists of assets turnover, inventory turnover, receivable and others.