Analyzing an organization’s financial efficiency requires an understanding of assorted financial statements in addition to the flexibility to interpret important monetary ratios. The main financial statements detailing the financial efficiency of a company are the stability sheet, statement of money flows, and the revenue statement. These statements present data that can be used to calculate various financial ratios to better perceive the financial efficiency of an organization. Some vital ratios include the current ratio, profit margin, return on property, value-earnings ratio, etc. Each of the financial statements and ratios present essential info relevant to the financial facet that every represents; nevertheless, with out making use of context and comparability, all of these numbers mean little or no. Benchmarking is a method of creating a normal for comparison to add context to the financial info supplied in monetary statements and ratios to derive meaning from these invaluable information.
When faced with …