The best way to be able to find out if a business or entity is performing up to par is to make use of financial ratios that include current ratios, liquidity ratios and rates of return. These ratios, usually taught in financial classes that cover accounting and finance, are good measures instead of looking at presented figures and amounts which need to be combined properly to determine how feasible and effective the operational aspect of a business is.
It is best to understand the reason for such ratios before hand. While finding the proper figures located in the balance sheet and the income statement is easy, finding out what the given statistics would point towards to is more important. Financial assessment of corporate operations is only one aspect, but deeper analysis helps mold the entire internal management side and see if they coincide with the actual target set by management beforehand.
[tags]financial ratios, business, investment, financial assessment, budgeting[/tags]
Originally posted on February 25, 2007 @ 1:14 am