Calculating Ratios Balance Sheet
Balance Sheet Ratios Types Formula Example Accountinguide from accountinguide.com Introduction Calculating ratios on the balance sheet is an essential skill for any investor or financial analyst. Ratios provide valuable insights into a company's financial health, performance, and potential risks. By analyzing these ratios, investors can make informed decisions about whether to invest in a company or not. In this article, we will explore the different ratios that can be calculated using the balance sheet and how they can be interpreted. What is a Balance Sheet? A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It consists of three main sections: assets, liabilities, and equity. The assets represent what the company owns, while the liabilities and equity represent what the company owes to its creditors and shareholders. Assets Assets are classified into two categories: current assets and non-curren