Financial ratios

Ratio analysis is very useful in assessing four major areas of the well being of a business: 2.1 LIQUIDITY RATIOS: shows the ability of current assets to meet current debt obligations. 2.2 DEBT COVERAGE RATIOS: shows the ability to service debt. 2.3 OWNERS EQUITY RATIOS: shows the owner's investment in the assets of the Company. 2.4 OPERATIONAL RATIOS: shows the efficiency of management's performance.