Explain how importance are financial statements and rations in today’s current financial and economic environment 2020.

Expert Solution

Importance of financial statement and ratio in today's environment-

A. financial statement and ratio analysis will be helpful in order to determine the past trend of performance of a company

B. financial statement are also used in contemporary world in order to determine the performance of a company in respect to its peers

C. financial ratio analysis is the most popular form of analysis which are used for finding out the liquidity as well as solvency along with the profitability of the company

D. financial statements are providing up with financial analysis of A company which will be helpful in determination of the financial weakness and strength in the contemporary world.

E. financial ratios and financial statements are also included in the decision making process of the company and it is also used by manager for estimation of the performance of his own company

F. Financial ratios can be mixed with the qualitative analysis and they can help in making decision regarding investment in the company.

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