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Hi there,
I’m doing Topic 5 and am struggling to keep within the word count. I’m currently doing Revenue Analysis along with other 6 financial ratios, so all together 7. Is this enough for the RAP, or do I have to do more financial ratios? Thank you
Probably it depends which you have chosen as it is better to have 6 relevant ratios with a good strpread rather than 10 inappropriate ones or ratios that are too similar [i.e. if you have ROCE, ROA and ROE they are very similar as is the current ratio and the quick ratio]. Normally a couple of ratios relevant to revenue, profit and margins, the current ratio [or debtor/ creditor days] and inventory turnover [if it is a manufacturer], gearing and a couple of investor ratios would be appropriate as they cover profitability, liquidity, liabilities and investor positions
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