RATIO

INTERPRETATION OF RATIO ANALYSIS

     Ratio analysis is the most important step in accounting. The analysis provides an idea about the profitability and financial position of a company and the financial statements have to the analyzed and interpreted. The interpretation of financial statement will explain the meaning and significant of the data so arrange. They will depict the relation ship between profit and capital employed current assets and current liabilities, sale gross profits have to be explained comparisons are also made. Comparisons of relationship between various financial factors of the same company over a period of time can be made. Similarly, Comparisons can be made between two or more companies. 

classification of Ratio

Lets we the classification of ratio in detail…