class 12 accountancy ratio analysis or accounting ratio important Notes
Accounting Ratio . ... Short & Easy Notes for B oard Exam #1. What is ratio analysis? What are its main importance? => Ratio analysis means examination and interpretation of numerical relationship between two numbers. It is used as yardstick for evaluating the financial position of the group. Following are its importance; i. It makes the figure simple and understandable. ii. It provide basis for preparing budget and determine future line of action. iii. It analyse the performance of the firm. iv. It indicates efficiency and profitability of the business. v. It helps the assessing solvency position of the business. vi. It helps in measuring short term and long term financial position. vii. It helps to know overall strength of the industries. #2. Write the objectives of accounting ratio. => Following are its main objectives i. To measure the profitability of the concern. ii. To determine the operating efficiency of the business. iii. To know the solvency position of...