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Foundation Degree Hospitality Management
Finance & Accounting
Pages 3 (753 words)
The assessment of financial and operational performance of an organization can be accomplished through the use of ratio analysis. This is achieved by evaluating the relationship of different figures generated from the company’s financial statements.
In simple definition, ration analysis refers to the process by which the figures are quantified in order to understand business performance in terms of financial and operational management. Ratios analysis can be conducted to compare trends in the inter year performance of the organization. It can also be done to compare financial performance of several companies in the same industry. Similarly, the result of the analysis is comparable with that of the industry to which the company belongs. There are five main ratios that are applicable in this scenario. These include Profitability ratios, sales ratios, liquidity ratios, efficiency ratios, and financial ratios. Based on this brief introduction, ratio analysis of the Brown Sugar Cafe will follow in the next part ...
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