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The concept of ratio analysis

Ratio analysis based mainly on data extracted from the firm's financial
accounting records ­ usually the balance sheet and income statement.
However, for some ratios, information need to be extracted from the
management accounting information or other sources.

What is ratio?

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Inter-firm comparisons ­ comparisons between companies.

Intra-firm comparisons ­ with in a company, for examples comparing

Comparisons to a standard ­ certain levels of performance s are
recognized as efficient within the business community. A company can
compare itself with these standards in order to asses…

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