Wk 6, QRB 501: DR 1

APA format

175 - 265 words

Cite at least one reference

Respond to the following:

Dr. Susan Jones

19 hours ago, at 12:51 AM

Financial ratios are relationships between different accounts from financial statements—usually the income statement and the balance sheet—that serve as performance indicators. Being relative values, financial ratios allow for meaningful comparisons across time, between competitors, and with industry averages.

Five key areas of a firm’s performance can be analyzed using the following financial ratios:

1.  Liquidity ratios
2. Solvency ratios
3. Asset management ratios
4. Profitability ratios
5. Market value ratios

What does each ratio do for a business?