Generally, when we talk about ratio, it is just a comparison between two values or a relating. In finance, Ratio Analysis refers to a comparison of different amounts appearing in the financial statement or book of accounts which helps the stakeholders to get a precise and understandable interpretation. A business's health in terms of its revenue, liquidity, the efficiency of operations, and profitability is one of the most common interests of most stakeholders, including the business itself.
Ratio analysis in management accounting is generally conducted yearly after the preparation of financial statements. However, there might be times when you require ratio analysis for urgent work. We at Whiz Consulting can provide you with financial statement ratio analysis services. 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 must 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. We at Whiz Consulting provide ratio analysis services for UK-based businesses. If you are a business based in London, Birmingham, Manchester, and any other place in the United Kingdom and need a ratio analysis services provider, we are your go-to service provider.
It compares the companies' ability to generate revenue with its expenses to arrive at a desired rate of return and recognise if there is any shortfall. It includes ratios like:
It measures the ability of a company to pay its day-to-day debt on time. It is an important ratio or test to determine whether the company can cover short-term obligations and cash flow. It includes the ratios like:
Return on Investment or Return on assets measures the return on investment concerning the investment cost. It is a broad measure of investment profitability. It includes the ratios like:
It measures how well a company operates its 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, i.e., making sales. These ratios are also used by the company and its investors and creditors in looking at the operations of profitability of the company and comparing them. It includes the ratios like:
It measures the company's ability to make payments and pay off its long-term obligations to creditors. A balanced solvency & Leverage ratio indicates a more creditworthy and financially sound company in the long term. 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 in indicating the value of a company. It includes the Ratios like:
Our accounting personnel at Whiz Consulting are experts in identifying and calculating ratios and providing you with an in-depth understanding of your business's financial performance.
With the complex nature of financial statements, crucial information is lost in the pile of data and figures. Ratios will help draw attention to such problems and help simplify difficult statistics.
Ratio analysis presents the financial statement into comparative figures, thus helping the management compare and evaluate the financial position of the firm and the results of their decisions.
Financial ratio analysis reports of two companies can be compared to enable the company to better understand its fiscal position in the economy. It also allows the company to conduct comparisons between industry standards and intra-firm comparisons.
