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The Performance Ratios report provides a comprehensive overview of a company's financial health and performance, using key performance indicators (KPIs) and ratios derived from the three main financial statements: the Income Statement, Balance Sheet, and Statement of Cash Flows. This report helps businesses identify trends, strengths, and weaknesses in their financial performance, enabling them to make informed decisions to improve profitability and achieve their financial goals.
Here are some of the key insights you can gain from the Performance Ratios report:
- Liquidity Measurement Ratios: These ratios assess a company's ability to meet its short-term obligations. Common liquidity ratios include the Current Ratio and Quick Ratio, which measure the company's ability to pay its current liabilities with its current assets.
- Profitability Indicator Ratios: These ratios measure a company's profitability in relation to its sales, assets, and equity. Common profitability ratios include Gross Profit Margin, Operating Profit Margin, and Net Profit Margin.
- Debt Ratios: These ratios assess a company's leverage and its ability to manage its debt. Common debt ratios include Debt Ratio and Debt-to-Equity Ratio, which measure the proportion of the company's assets and equity financed by debt.
- Cash Flow Indicator Ratios: These ratios measure a company's ability to generate cash from its operations and manage its cash flow effectively. Common cash flow ratios include Cash Flow to Debt Ratio and Operating Cash Flow to Sales Ratio.
By analyzing these KPIs and ratios, businesses can identify areas for improvement, optimize their financial performance, and make data-driven decisions to achieve their goals.
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