Financial Ratio Analysis Accounting, Finance, SPSS Essay (Essay Sample)

FINANCIAL RATIO ANALYSIS
These are mathematical comparisons that involve grouping together a business account, which has a distinct type of relationship. This information is useful since it helps those parties related to the company to understand how it is performing and will also be able to identify those places that need improvement. Different companies in the industries compute their financial ratios based on their performance, and these ratios are the ones that are used to come up with the industrial average. The industrial average is used by the company to gauge its performance.
Current Ratio
This is a liquidity ratio that is used to measure the ability of the company/firm to meet their short term obligations (short term liabilities) by using current assets (like cash and cash equivalent and marketable securities).
Current ratio=Current Asset/Current liabilities
The current ratio for the organization is 3.22, and this is clearly shown in the excel document. This means that the current asset is 3.22 times more than the current liabilities and the organization will be able to settle its short term obligation when they are due. The organization is performing well in the industry since its current ratio of 3.22 is higher as compared to that of the industry which is 2.883