Financial Analysis Methods to Assess Business Health

Question 1

Profitability ratio

Answer 1

analyze a business’s ability ot generate earnings in comparison to expense costs

Question 2

Liquidity ratios

Answer 2

measure the business’s available cash or ability to pay off short-term debts

Question 3

Operational efficiency and employee productivity ratios

Answer 3

measure efficiency of employees and business resources to generate a profit

Question 4

Capital structure ratios

Answer 4

assess how the business uses debt to finance operations