Ratio analysis involves analyzing financial statements in order to appraise a firm's financial position and strength.

Question

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Ratio analysis is a tool used to evaluate a company's financial health by analyzing its financial statements, including balance sheets, income statements, and cash flow statements. It involves calculation and interpretation of various ratios such as liquidity ratios, profitability ratios, efficiency ratios, and solvency ratios to determine the company's financial position and strength.

Ratio Analysis Involves Analyzing Financial Statements in Order to Appraise