Ratio, as the name suggests, is a comparison between two numbers. In Finance, Ratio Analysis refers to comparing different items appearing in the books of accounts or financial statements to give a precise and understandable interpretation. One common interest of stakeholders, including the company itself, is to assess the health of a company in terms of its revenue, liquidity, the efficiency of operations, and profitability.
We at Whiz Consulting have accounting experts who are specialised in identifying and calculating ratios and giving you an in-depth understanding of your business financial performance. Financial statements are generally insufficient to provide information to the readers or stakeholders at first instance on their own. The numbers shown in those statements required to be put into such a form or format so that stakeholders can better understand different aspects of the company’s operations and its health in the expression given by the company.
While ratio analysis is a part of the financial analysis, you might want financial ratio analysis services for urgent ratio analysis requirements or want specific ratio analysis, which is unique for your business requirement. To cater to this need, Whiz Consulting provides ratio analysis services for Australian businesses. Financial ratio analysis services can help you understand your business shortcomings and strong points to help improve it. Additionally, outsource financial ratios service can help you get a new perspective of your business finance.
It compares the company’s ability to earn or generate revenue with its expenses to arrive at the desired return rate and recognise any shortfall. It includes ratios like-
It measures the ability of a company to pay its day to day debt on time. It is a crucial ratio or test to determine its ability to cover short term obligations and cash flow. It includes the ratios like-
These ratios measure the company’s ability to make payments and pay off its long-term obligations to creditors. A balanced solvency & leverage ratios indicate a more creditworthy and financially sound company in the long term. It includes the ratios like-
It measures how well a company operate their assets to generate income. It also signifies the time a company takes to collect cash from the customer or the time it takes to convert inventory into cash that is making sales. The management, investors and creditors also use these ratios to assess the profitability of the company’s operation. It includes the ratios like-
Return on Investment or Return on Assets measures the amount of return on investment concerning the investment cost. It is a broad measure of investment profitability. It includes the ratios like-
These ratios help to understand the economic status of the stock of a particular public traded company. They determine the connection between the price per share of a company and its earnings, growth and assets, or we can say it helps indicate the value of a company. It includes the Ratios like-
We at Whiz Consulting have accounting experts who are specialised in identifying and calculating ratios and giving you in-depth in understanding your business financial performance.
The prime benefit of Ratios is - it simplifies complex accounting and Financial data into simple ratios to comprehend what and how the company is performing in terms of its efficiency, solvency, financial efficiency, etc.
The Ratios calculated over some periods facilitate a trend in the movements of company operations. The ratio analysis report supports the management decision to prepare or approve the budgets for the future based on previous trends.
The similar Ratios calculated by the companies operating in a similar industry provides a better scope of inter-company comparison. It helps investors and the company assess and review whether they are managing the company efficiently.
