Name any four ratios that the management of every firm is interested in along with their significance?

CS Professional · Banking - Law and Practice · PYQS · June 2015
Name any four ratios that the management of every firm is interested in along with their significance?

Answer & Explanation:

Every management is interested to maintain sufficient liquidity and utmost profitability of the firm, they manage. The ratios in which management is more interested are: Current ratio shows the liquidity strength of the firm. Net Profit Ratio gives the net profit margin of the firm that can be compared with the industry about its competitors. It is one of the important indicators of management's efficiency. Return on Equity ratio shows the earning capacity of proprietors' fund. Debt to Equity ratio is the key financial ratio and is used to assess the long term financial solvency of a firm.

Topics: Financial Analysis

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