5 categories of financial statement analysis
Primary Task Response: Within the Discussion Board area, write 250–300 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions with your classmates. Be substantive and clear, and use examples to reinforce your ideas.
There are basically 5 categories of financial statement analysis that is employed to assess the health of companies related to their financial performance. They are generally classified as liquidity, efficiency, debt, profitability and market-based ratios.
Select 1 of the categories, and discuss the following:
- What does each ratio in the category attempt to measure?
- What individual ratios does it employ?
- Discuss each of the ratios that you have identified.
- How is each calculated?
- What does each measure?
- What is the general rule of thumb associated is ratio?
- How do you know if a ratio is improving or deteriorating?
- And what are some of the weaknesses or limitations of each ratio?