Why are financial ratios important?
It is crucial to concentrate on financial ratios as it offers business owners a chance to assess financial performance. Comparing business, the income statement, balance sheet, and cash flow offer some insight. Going beyond the numbers requires understanding financial ratios to show business improvement.
8 Steps to use financial ratios to improve your Businesses
1. Considering gross margin percentage
2. Net operating margin percentage
3. Operating leverage
4. Financial leverage
5. Total leverage
6. Debt-to-equity ratio
7.Quick and current ratios
8. Return on equity
Source: 8 Steps To Use Financial Ratios To Improve Your Businesses
