Calculating ﬁnancial ratios can give clues to underlying conditions that may not be noticed by examining each ﬁnancial statement item separately.

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Financial ratios provide a way to compare different financial statement items and can reveal trends or patterns that may not be easily noticed when looking at individual items in isolation. They can also help analysts identify potential issues with liquidity, debt management, profitability, and other key areas of financial performance.

Calculating ﬁNancial Ratios Can Give Clues to Underlying Conditions That