Business, Management and Accounting
4 years ago

Unlocking the Power of Financial Ratios for Smarter Decision Making

SSRN Electronic Journal
Theoretical Review of the Role of Financial Ratios
Diwahar Sunder Nadar, Bharti Wadhwa

Paper Summary

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Financial ratios are important tools in finance, and this review aims to provide a comprehensive understanding of their use. The review categorizes past studies into areas like financial evaluation, insolvency prediction, and decision making. It also identifies limitations such as too many ratios, lack of normality, and impact of accounting frameworks. The review presents a wealth of literature on financial ratios in an organized manner.