Financial managers use RATIO ANALYSIS to assess the financial strengths and weaknesses of their firm.
The numbers used in the ratio analysis are the figures in the firm's financial statements. These ratios indicate the following in relation to the firm:
1) Short-term Solvency Ratios,
2) Debt Management Ratios,
3) Asset Management Ratios,
4) Profitability Ratios,
5) Market Value Ratios.
