Learning Goals : By Completing This lecture, you should be able to know

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• How to Calculate and interpret each of these ratios .
• Profitability Ratios .
• Financial ratios

Financial Management Dr : Samira Allam Chapter two Financial Ratios Profitability & Market Ratios Learning Goals : By Completing This lecture, you should be able to KNOW : The meaning of each of the Financial Ratios ( Profitability , Market ) Ratios How to Calculate and interpret each of these ratios . Financial Ratios : Can be divided into these Ratios : Activity or efficiency Ratios . Liquidity Ratios . Solvency Ratios . Profitability Ratios . Valuation or Market Ratios . Goals : Classifying Calculating and Interpretation of Profitability & Market Ratios Financial ratios can be segregated into different classifications by the type of information about the company they provide. One such classification scheme is: Liquidity ratios: Liquidity here refers to the ability to pay short-term obligations as they come due. Solvency ratios: Solvency ratios give the analyst information on the firm's financial leverage and ability to meet its long-term obligations. Profitability ratios : Profitability ratios provide information on how well the company generates operating profits and net profits from its sales. 4- Valuation Or Market ratios earnings per share, and price to cash flow per share are examples of ratios used in comparing the relative valuation of companies. Download 2.59 Mb. Share with your friends: