This project focuses on Ratio Analysis, a fundamental tool in financial statement analysis used to evaluate the financial performance and position of a business. The primary objective of this study is to interpret the financial health of a company through key ratios derived from its balance sheet and income statement. Ratio analysis helps in assessing liquidity, profitability, solvency, and efficiency, providing meaningful insights to stakeholders such as investors, creditors, and management.The study includes the calculation and interpretation of major financial ratios such as the current ratio, quick ratio, debt-equity ratio, return on equity (ROE), return on assets (ROA), gross profit margin, net profit margin, and inventory turnover ratio. By applying these ratios to a selected company’s financial data over a period of three to five years, the analysis reveals trends in performance and identifies strengths and weaknesses in financial management.The results demonstrate how ratio analysis can support better decision-making and strategic planning. The study concludes that while ratios are useful indicators, they should be interpreted in context and used alongside other analytical tools for a complete financial assessment.
Ratio Analysis, Financial Performance, Profitability Ratios, Liquidity Ratios, Solvency, Financial Statements, Decision-Making, Trend Analysis
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