What are the five basic types of financial ratios?
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.