Category Archives: Business Finance

Efficiency ratios

We discussed the importance of financial ratios along with their limitations for financial analysis purposes. After having described profitability ratios we can have an insight on efficiency ratios. This kind of ratios aims at measuring how successfully the resources of … Continue reading

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Profitability ratios

In a previous post we discussed the importance and limitation of financial ratios. In this post we will consider some of the most important ratios to measure the profitability of a business. Return on ordinary shareholders funds Comparison between the … Continue reading

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Financial Ratios

Financial ratios are an effective way to measure the financial health of a business and compare performance of different organisations. Even whereas a significant difference in the scale of businesses exists, ratios, which relate financial resources one to another, eliminates … Continue reading

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Income statement and cash flow

Income statement is a way to understand whether a business is profitable or not over a period of time. It measures the inflows of revenues (assets) and the outflows of expenses incurred in the attempt of producing revenue. The difference … Continue reading

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