Super Business Manager

Each stakeholder group will want to know different information about a business, therefore will analyze Final Accounts differently.

After a brief introduction to five different types of ratios in the last article, let’s take a look at those accounting ratios with more details.

Different types of ratios are used to analyze information from Profit and Loss Account (P&L Account) and Balance Sheet to judge financial performance.

Ratio Analysis helps to compare business performance using historical comparisons and using current comparisons between different companies.

Ratio Analysis is a quantitative management tool used for analyzing the financial performance of a business organization.

Accountants need to develop the knowledge and skills of amending Final Accounts such as Profit and Loss Account (P&L Account) and Balance Sheet.

There is a number of different methods accountants can use to calculate depreciation of Fixed Assets in Balance Sheet. Straight-Line Method. Reducing Balance Method.

Depreciation is a decrease in the value of Fixed Assets. Some assets such as Equipment (machinery) and Vehicles tend to fall in value over time.

Inventories are unsold ready goods, might also be in the form of raw materials and components, or some are in the process as work in progress.

Goodwill represents the reputation and prestige of a business that has been operating on the market for considerable amount of time.

It is difficult to measure the exact value of intellectual property that is expressed in Balance Sheet in the form of Intangible Assets.

Intellectual Property is human capital, know-how and industry knowledge. It is somewhat expressed on Balance Sheet in the form of Intangible Assets.

Balance Sheet is a statement of the estimated value of the company. The information can be used in a number of ways.