Ratio analysis refers to the analysis of various pieces of financial information in the financial statements of a business. They are mainly used by external analysts to determine various aspects of a business, such as its profitability, liquidity, and solvency., Ratio analysis is one of the most useful techniques for the analysis or interpretation of a financial statement and performance of a company. It provides insights into a company’s profitability, liquidity, efficiency, and solvency, enabling businesses, investors, and creditors to make informed decisions., What Is Ratio Analysis? Ratio analysis involves the calculation and interpretation of financial ratios derived from financial statements such as the balance sheet, income statement, and cash flow statement., Ratio analysis is a quantitative analysis of information in a company's financial statements. It offers business owners and managers valuable data to make decisions about a company's economic performance. Besides, investors, creditors, and regulators use ratios to evaluate a company's liquidity, profitability, solvency, and efficiency., Ratio analysis refers to the analysis and interpretation of financial statements through ratios. Ratios are customarily presented either in the form of a coefficient or a percentage or a proportion., Ratio analysis is a helpful tool for assessing a company's financial health and progress over time. It involves analyzing five categories of ratios, including liquidity, solvency, profitability, efficiency, and coverage. These ratios can give you valuable insights into the company's performance..