财务指标的讲义

Although extremely valuable as analytical tools, financial ratios also have limitations. They can serve as screening devices , indicate areas of potential strength or weakness, and reveal matters that need further investigation.

Should be used in combination with other elements of financial analysis.

There is no one definitive set of key ratios; There is no uniform definition for all ratios; and there is no standard that should be met for each ratio.

There are no "rules of thumb" that apply to the interpretation of financial ratios.

Differences in firm size may confound cross sectional and time series analyses. To overcome this problem, common size statements are used.

A common size balance sheet expresses each item on the balance sheet as a percentage of total assets

A common size income statement expresses each income statement category as a percentage of total sales revenues