Efficiency of Financial Ratios Analysis for Evaluating Companies’ Liquidity
Author: Chnar Abdullah Rashid
Abstract: This research mainly focused on the evaluation of the companies’ liquidity by using financial ratios analysis. One of the UK retail company has selected to be evaluated through analyzing their data which is available on their financial statements. Potentially, cash flow statement of this company has considered to be used for evaluating liquidity, because most of the important information for this purpose can be found in this statement. A hypothesis has been developed in which financial ratios analysis can help the investors to choose the company for purchasing their shares and it has been approved because the numbers indicated that liquidity is important as much as profit for attracting investors to purchase the company’s share owing to providing confidentiality for the company. More information has proposed in this research.
Keywords: Financial Ratios Analysis, Liquidity, Liquidity Ratios, Current Ratio, Quick Ratio
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International Journal of Social Sciences & Educational Studies
ISSN 2520-0968 (Online), ISSN 2409-1294 (Print), March 2018, Vol.4, No.4