A

**ratio analysis**is a quantitative**analysis**of information contained in a company's**financial**statements.**Ratio analysis**is used to evaluate various aspects of a company's operating and**financial**performance such as its efficiency, liquidity, profitability and solvency.Also, what is the meaning of financial ratios?

A

**financial ratio**or accounting**ratio**is a relative magnitude of two selected numerical values taken from an enterprise's**financial**statements. Often used in accounting, there are many standard**ratios**used to try to evaluate the overall**financial**condition of a corporation or other organization.Why do we use financial ratios?

**Ratio analysis**is a useful management tool that will improve your understanding of

**financial**results and trends over time, and provide key indicators of organizational performance. Managers will

**use ratio analysis**to pinpoint strengths and weaknesses from which strategies and initiatives can be formed.

What is the most important financial ratio?

**15 Financial Ratios Every Investor Should Use**

- 1) Price-to-Earnings Ratio (P/E)
- 2) PEG Ratio.
- 4) Price-to-Book Ratio (P/B)
- 5) Dividend Yield.
- 6) Dividend Payout Ratio.
- 7) Return on Assets (ROA)
- 8) Return on Equity (ROE)
- 9) Profit Margin.