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Financial Ratios and Analysis

Harvard (Charles River) IMG 7718
(Harvard University - Harvard Taiwan Student Association)



- Overview

Financial ratios are created using numerical values obtained from financial statements to obtain meaningful information about a company. 

Financial ratios provide entrepreneurs with a way to evaluate a company's performance and compare it to other similar businesses in the industry. Ratios measure the relationship between two or more components of a financial statement. They are most effectively used when comparing results over several periods. This allows you to track your company's performance over time and spot signs of problems. 

The numbers on a company's financial statements (balance sheet, income statement, and cash flow statement) are used to perform quantitative analysis and evaluate a company's liquidity, leverage, growth, profit margins, profitability, rate of return, valuation, and more.

Below are some key financial ratios that measure the financial health of a business. 


- Assets Liability Management


- Liquidity


- Asset Management


- Market Trend 


- Profit Ability


[More to come ...]



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