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How do ratios offer more information than balance sheet data do?

How do ratios offer more information than balance sheet data do?

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Answer #1
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1) Ratios assist in inter and intra firm comparison.
2) Ratios helps in analysing the Balance Sheet.
For eg. Days of receivable outstanding ratios helps to understand how long the money stuck in the receivebles
3) Ratios assist in measuring return
Return on equity ratio provides the information what is the rate of return which is earned by company
4) Ratios provides meaning full relation between figures appearing in balance sheet
Asset turnover ratio provides us how effective the assets are utilized to generate sales

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