Are you searching for ways to analyse financial performance ? If yes, then you are at right place. Here, we are going to share the financial performance anaylsis or ways to analyse financial performance.
The following ratios are used to analyse the financial performance of the company. These ratios are
basically show the profitability and efficiency of the company.
Retur on total assets
Rate of return on ordinary shares
EBIT/ Ordinary Shares
Operating Profit Margin
Operating Profit/ Total Revenue
Inventories turnover period
Cost of goods sale/Average Inventory
Cash conversion cycle :-
The cash conversion cycle (CCC) is a process or a cycle where the company purchases inventory, sells
the inventory on credit as an account receivable, and then collects the account receivable or turns it
Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding – Days Payable
Comparative income statement :-
Comparative financial statements are the complete set of financial statements that an entity issues, revealing information for more than one reporting period.
Final Words :-
These are the ways through which you can analyse the financial performance. If you have any kind of issues or queries feel free to comment below. We will help you ASAP.