ANALYSIS OF FINANCIAL STATEMENTS
A Coggle Diagram about Ratio Analysis (1) Liquidity Ratios, 3) Debt Management Ratios, 4) Profitability Ratios , 5) Market Value Ratios , 2) Asset Management Ratios and :star: To measure the firm's performance.
:star: Used to highlight weaknesses and strengths of firm.
:star: Ratio comparisons should be made through time and with competitors (trend & peer analysis).), Limitations of Ratio Analysis and Dupont System (ROE) (:diamond_shape_with_a_dot_inside: It shows the relationships among asset management, debt management & profitability ratios.
:diamond_shape_with_a_dot_inside: ROE = Profit margin X Total assets turnover X Equity multiplier
:diamond_shape_with_a_dot_inside: ROE = (NI/Sales) X (Sales/TA) X (TA/Equity)
:diamond_shape_with_a_dot_inside: ROE = ROA X (TA/Equity) )