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Introduction Ratios are a method of summarising and presenting financial information in an easily understandable form. They are used to assist us in assessing the performance of a business by identifying relationships between different figures that are considered to be significant. Ratios can be split into five groups, these five groups are: 1. Cash Flow - These ratios measure the businesses ability to meet financial commitments from cash flow. 2. Liquidity - These assess the businesses ability to meet the current liabilities as they fall due. 3. Asset Management - These show the speed of funds through the business operating cycle and how effectively working capital is managed. 4. Stake - These compare the extent to which the business is funded by its shareholders, lenders and creditors and indicates its ability to service external debt. 5. Profitability - These ratios show profit margins, return on capital and equity. Ratio Analysis Cash Flow Cash flow is the lifeblood of any...

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