26/10/2023

26/10/2023

Making Sense of Financial Ratios

Written by : Aiman Roslan
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Welcome back to our ‘What We Do’ series. This week, the topic we’re examining is Making Sense of Financial Ratios. We will be looking at how financial ratios assist businesses in forming well informed decisions and the importance for businesses to identify key risk areas using financial ratios.
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It is crucial that a business decision is backed with relevant and quality information tailored to the business needs. By opting to use financial ratios in forming a decision, businesses will have the opportunity to analyse the impact of a decision through performing a financial ratio calculation. 
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Financial ratios assist businesses to understand the key risk areas surrounding their operations in areas such as cashflow, debtors and creditors turnaround. As these key financial areas are monitored, businesses can benefit in identifying any potential areas that need addressing on the offset and avoid similar issues from arising in the future. Additionally, the use of financial ratios offers businesses an insight on their performance against their main competitors within the industry. It allows businesses to identify areas of improvement in their current operations and potential room for growth and opportunities to excel in a different niche area in the future. 

Conclusion

Businesses will be better equipped to anticipate and tackle any changes within the business environment and be in position to assess the impact of such changes with the use of financial ratios. This will generate a positive impact on the business operations and guide businesses to achieving stability and growth in the coming years. 

How can Cooney Carey assist in this process?

We have vast experience in advising a variety range of businesses which allow us to identify and advise you on the relevant key financial ratios linked to the success of your business. We design and formulate comprehensive business plans to help businesses like yours make better decisions moving forward.

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Contact our team today at info@cooneycarey.ie if you are interested in learning more about our Financial Analysis Services.