Business owners can also use financial ratios to create benchmarks for comparative analysis. Financial ratio analysis also allows business owners to compare their company to businesses with dissimilar business operations.
For example, low-income economies that have a strong human capital base can take advantage of the rapid decline in the cost of computing power and telecommunication over the last decade that has made it possible to deliver IT service from a remote location. IGC, There is considerable potential for the development of ICT industries in Bangladesh because of the availability of trained personnel at relatively low wage rates.
However, in order to capture significant gains from the growth of the ICT industry worldwide, policy makers and firms both require a clear understanding of its dynamics. While a cheap and abundant human capital base can explain the early stage of software industry development, improved productivity is required to take advantage of emerging opportunities and carve out a niche in the export of outsourced services.
Objectives This Study will examine the financial statement and analysis its financial prospects in terms of liquidity, debt, company performance, efficiency and the market performance of the market. Methodology 3 The Financial Ratios: Liquidity can be measured through several ratios.
Current ratio The current ratio is the most basic liquidity test. It signifies a company's ability to meet its short- term liabilities with its short-term assets. A current ratio greater than or equal to one indicates that current assets should be able to satisfy near-term obligations.
A current ratio of less than one may mean the firm has liquidity issues. Quick Ratio The quick ratio is a tougher test of liquidity than the current ratio. It eliminates certain current assets such as inventory and prepaid expenses that may be more difficult to convert to cash.
Like the current ratio, having a quick ratio above one means a company should have little problem with liquidity. The higher the ratio, the more liquid it is, and the better able the company will be to ride out any downturn in its business.
Acid test ratio The quick ratio also behalf like the current ratio. One interesting observation is the Current and Quick ratios of all selected year are same, because of null inventories in their operations.
Ranking in terms of Liquidity Debt Ratio The debt ratio compares a company's total debt to its total assets, which is used to gain a general idea as to the amount of leverage being used by a company.
A low percentage means that the company is less dependent on leverage, i. The lower the percentage, the less leverage a company is using and the stronger its equity position. In general, the higher the ratio, the more risk that company is considered to have taken on.
It might not be normal compared to the industry and which might put the firm under risk but indicate high leverage. It seems using more debt compared to the industry and which might put the firm under risk pressure but indicate high leverage.
One of the most frequently used tools of financial ratio analysis is profitability ratios which are used to determine the company's bottom line.
Profitability measures are important to company managers and owners alike. If a small business has outside investors who have put their own money into the company, the primary owner certainly has to show profitability to those equity investors.A Comparative Study of Financial Statement of ICICI and HDFC through Ratio Analysis 95 REFERENCES 1.
Alexander, D., Britton, A., Jorissen, A. () International Financial Reporting and Analysis, 3rd edition. A Comparative Study of Financial Statement of ICICI and HDFC through Ratio Analysis 93 Figure 5 From the above table and graph it is clear that HDFC profit rate is .
Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational efficiency, and profitability by comparing information contained in its financial statements.
Jan 17, · Ratio analysis can be used to compare information taken from the financial statements to gain a general understanding of the results, financial position, and cash flows of a business. This analysis is a useful tool, especially for an outsider such as a credit analyst, lender, or stock analyst.
Dec 15, · Comparative Analysis of Neepco Through Ratio Analysisgh Ratio Analy Essay Introduction to Financial Statement Analysis Meaning of Financial Analysis is to classify the data in simple form given in Financial Statements and to compare with each other to find out the strong points and weakness of the business and to take decisions for future.
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