Explain how the credit analyst's focus will differ from the investment analyst's focus. What do each of the following ratios measure? Liquidity ratios Activity ratios Leverage ratios Profitability ratios Market ratios Explain the difference between Horizontal and Vertical analysis.
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Explain how the credit analyst's focus will differ from the investment analyst's focus. What do each of the following ratios measure? Liquidity ratios Activity ratios Leverage ratios Profitability ratios Market ratios Explain the difference between Horizontal and Vertical analysis.
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