WHAT IS THE USE OF RATIO ANALYSIS

Answer Posted / priyanka kondlekar

An integral aspect of fundamental analysis involves
performing what many would call “ratio analysis”. This
involves calculating a number of different industry
standard ratios and comparing them to various benchmarks.
The benchmarks can be the ratios of other competitors,
industry average ratios, or industry “rules-of-thumb”.
There’s no set procedure for performing ratio analysis
because it all depends on the type of company you’re
analyzing – certain industries have industry specific
ratios. Ratio analysis works best as a supplement to other
stock analyses.

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