calculating ratio balance sheet

Calculating Ratios Balance Sheet


For any company and for any business knowing its assets and its liabilities is extremely important. This is because it helps the organization in knowing what its current financial position is and what decisions are to be made which would help the organization be in a better financial state. For this, an organization needs to have a balance sheet. A balance sheet is a statement which helps the organization in knowing how many assets it has and how many liabilities does it need to fulfill. Apart from this, through a balance sheet a company can know what the company owns, how much does it owe to other people along with who owns the company? This is why an organization always refers to a balance sheet when it wants to know how much does it own and how much does it need to pay back to other people.

From a balance sheet, an organization makes use of various ratios which helps an organization in determining where it stands currently, financially and what does it need to do in order to be in a much better position or to come where it needs to be.

Various ratios such as the current ratio help the organization in determining the current position of the company, the inventories and etc. with all of this, an organization can have a sneak peek not only into the future but also in the present as well. a professional should be hired to keep a check of the balance sheet as well.



Calculating ratios balance sheet

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