What each financial ratio means?
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Furthermore, 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.
Beside above, what are 3 types of ratios? The three main categories of ratios include profitability, leverage and liquidity ratios.
Beside this, what are the different 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,
What is a good liquidity ratio?
A good liquidity ratio is anything greater than 1. It indicates that the company is in good financial health and is less likely to face financial hardships. The higher ratio, the higher is the safety margin that the business possesses to meet its current liabilities.