• A combined of selected ratios can predict bankruptcy of a firm.
• They are used to evaluate the ability of affirm to meet short¬term maturing financial obligations as and when they fall due.
• Ratios indicates the extent with which the firm has financed its assets with externally borrowed fixed return capital.
• Ratios indicates the ability of a firm to generate returns from sales and investments.
• Ratios can be used in industrial analysis.
• Ratios can be used in trend/time series analysis.
• Efficiency ratios indicates the efficiency with which the firm is utilizing its assets or resources at its disposal to generate sales revenue.
skilled writter answered the question on May 3, 2018 at 17:10
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