oboloo

oboloo Glossary

Ratio Analysis

oboloo Glossary

Ratio Analysis

Ratio Analysis Definition

A ratio is a mathematical comparison of two values. Ratios are used to analyze financial statements and assess a company’s financial health.

There are four main types of ratios: liquidity, solvency, efficiency, and profitability. Each ratio measures different aspects of a company’s financial health.

Liquidity ratios measure a company’s ability to pay short-term debts. Solvency ratios measure a company’s ability to pay long-term debts. Efficiency ratios measure a company’s use of assets and management of expenses. Profitability ratios measure a company’s bottom line.

Ratio analysis is a powerful tool that can help investors identify red flags and make informed investment decisions. However, it is important to remember that ratios should be used as part of a broader analysis of a company’s financial health.

Want to find out more about procurement?

Access more blogs, articles and FAQ's relating to procurement

Oboloo transparent

The smarter way to have full visibility & control of your suppliers

Contact

Feel free to contact us here. Our support team will get back to you as soon as possible

Oboloo transparent

The smarter way to have full visibility & control of your suppliers

Contact

Feel free to contact us here. Our support team will get back to you as soon as possible

© 2024 oboloo Limited. All rights reserved. Republication or redistribution of oboloo content, including by framing or similar means, is prohibited without the prior written consent of oboloo Limited. oboloo, Be Supplier Smart and the oboloo logo are registered trademarks of oboloo Limited and its affiliated companies. Trademark numbers: UK00003466421 & UK00003575938 Company Number 12420854. ICO Reference Number: ZA764971