# What are the five basic types of financial ratios?

**Financial ratios**are the

**ratios**that are used to analyze the

**financial**statements of the company to evaluate performance where these

**ratios**are applied according to the results required and these

**ratios**are divided into

**five**broad

**categories**which are liquidity

**ratios**, leverage

**financial ratios**, efficiency

**ratio**,

In respect to this, what are the 5 major categories of ratios?

**The five (5) major categories in the financial ratios list include the following :**

- Liquidity Ratios.
- Activity Ratios.
- Debt Ratios.
- Profitability Ratios.
- Market Ratios.

Also Know, what are 3 types of ratios? The **three** main **categories of ratios** include profitability, leverage and liquidity **ratios**.

Also know, what are the 5 categories of financial ratios and their purpose?

In general, **financial ratios** can be broken down into four main **categories**—1) **profitability** or return on investment; 2) liquidity; 3) leverage, and 4) operating or efficiency—with several specific **ratio** calculations prescribed within each.

What are financial ratios used for?

**Financial ratios** offer entrepreneurs a way to evaluate their company's performance and compare it other similar businesses in their industry. **Ratios** measure the relationship between two or more components of **financial** statements. They are **used** most effectively when results over several periods are compared.