Ratio Analysis
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Analysis and Interpretation of Financial Statements for Decision Making
MS: Analisis Nisbah · EN: Ratio Analysis · ZH: 比率分析
Meaning
Ratio analysis is a method of evaluating a business's performance and financial position by calculating the relationship between two figures in the financial statements. Ratios are grouped into profitability, liquidity and efficiency. It helps owners and stakeholders make decisions and compare performance across years or between businesses.
Example
Cerdik Bookstore wants to assess its 2023 performance. Its accountant calculates the gross profit margin, the current ratio and the rate of stock turnover, then compares them with the 2022 figures to see whether the business has improved.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5