Financial ratios are part of monitoring budget and cash flow
Financial ratios are part of monitoring Budget and cash flow
An economic rate requires reasoning the connection between two figures and asserting the meaning of that correlation. Financial ratios used to compare the past performance with actuals helps in the forecasting of budget and cash flow.
There are four types of ratios
• Profit ratio
• Efficiency ratio
• Liquidity ratio
• Solvency ratio
It used to indicate the profitability of the business.
• The gross profit margin.
• The net profit margin
• The return on capital invested in your business.
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