- April 12, 2020 at 1:25 pm
Hi everyone. I am sure there is somewhere in this forum where it is discussed but I need some tips on how to do the ratio analysis.
I think I am not on the right way to doing it. Please help
ThanksApril 26, 2020 at 9:46 am
It is not a case of doing ‘ratio analysis’ well but doing good evaluation.
There is an article on our homepage on evaluation that sets out what is required.
I presume you are doing Topic 8 therefore the very first thing you need to ensure is that you have done a good PEST and SWOT as these underpin company decisions and strategic direction. The ratios themselves are just measure of performance and indicative of whether the right decisions and strategic direction were taken and therefore you cannot do the evaluation without understanding management strategic decisions. Good SWOT and PEST analysis will then give you a fuller context in which to assess the ratios and more importantly the trends to evaluate company peformance.
There is also some information on this on the Brookes website
If you go into resources you will find a sheet on analysis and evaluation
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