Transcription of Accounting Ratios - NCERT
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Accounting Ratios - NCERT
Financial statements aim at providing financialinformation about a business enterprise to meetthe information needs of the statements prepared by a businessenterprise in the corporate sector are published andare available to the decision-makers. Thesestatements provide financial data which requireanalysis, comparison and interpretation for takingdecision by the external as well as internal users ofaccounting information. This act is termed asfinancial statement analysis. It is regarded as anintegral and important part of Accounting . Asindicated in the previous chapter, the mostcommonly used techniques of financial statementsanalysis are comparative statements, common sizestatements, trend analysis, Accounting Ratios andcash flow analysis.
list of the levels universally acceptable, and, in India, the industry averages are also not available. 5. Ratios based on unrelated figures: A ratio calculated for unrelated figures would essentially be a meaningless exercise. For example, creditors of Rs. 1,00,000 and furniture of Rs. 1,00,000 represent a ratio of 1:1.
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