Literature review on financial ratio analysis

In managerial approach profitability and in credit approach capacity of firm to pay debts is the main point of focus. Finally, we compare our results to those obtained previously for India and for the industrial countries.

Research paper on ratio analysis

Rachchh Minaxi A : In his research article on financial performance he has pointed and suggested that the financial statement analysis involves analyzing the financial statements to extract information that can facilitates decision making. Agricultural Bank of China provides investment banking, fund banking management, financial leasing and life insurance services. The perspective is one of the forecasting payoff to equities. The result divided into three parts and then compared with other companies to point out the problem and strong areas of business. To analyze the operating results DuPont analysis is also used. Inner-city engineering firms perform relatively less well on all indicators of performance compared with outer-city firms. M Pandey, Financial Statements analysis reduces reliance on hunches, guesses and intuition for business decisions. Moore and Atkinson point out the relationship between capacity to pay and financial ratios and shows results of ratio analysis influence the borrowing ability of firms. Libby reduces an original ratio set to five financial factors by a principal component analysis in connection with a bankruptcy study. We also structurally estimate parameters of a model economy in which intermediation and productivity shocks are present, allowing for the intermediation process to propagate the real shock.

He analysed selected co-operatives in Botswana for a period of and concluded that an aggressive approach has been followed by these firms during all four years of study.

Cooper conducted a study on Financial Intermediation on which he observed that the quantitative behavior of business-cycle models in which the intermediation process acts either as a source of fluctuations or as a propagator of real shocks.

To analyze the operating results DuPont analysis is also used. If both or one of them comes from the income statement the ratio can be called dynamic while if both come from the balance sheet it can be called static see ibid.

In other words both ratios gave important as well as different information from one and other. Financial statements are prepared to provide reliable information about the earning of business enterprise and it ability to operate of profit in future.

financial statement analysis review of literature from various authors

The ratios include cash flow-interest coverage, cash flow-dividend coverage, and cash flow from operations to cash flow in investments. He is thus able to tie in the ratio format aspects with the distributional properties of financial ratios to be discussed later in this review.

This study set the foundation for future research on ratio analysis.

Literature review on financial ratio analysis

In nineteenth century main reasons of using ratio analysis are power of financial institutions and shifting of management to professional managers. Inner-city engineering firms perform relatively less well on all indicators of performance compared with outer-city firms. While assessing the financial health of a company with the help of ratio analysis answers to questions relating to the company's profitability, as sets utilization, liquidity, financing and strategies capabilities may be sought. The model economy thus fails to match unconditional moments for the U. The results are not sensitive to using historical costs vs general price-level adjusted data. Regarding the second use of ratios, only under exceptional conditions will ratio variables be a suitable means of controlling an extraneous factor. Foulke create and promoted own set of financial ratios successfully. Agricultural Bank of China provides investment banking, fund banking management, financial leasing and life insurance services.

It provides diversified services and strives to expand into international market to become first class bank.

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