Financial Ratios Analysis

  • First Online: 01 November 2022

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literature review of financial ratio analysis

  • Felix I. Lessambo 2  

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When it comes to investing, analyzing financial statement information (also known as quantitative analysis), is one of, if not the most important element in the fundamental analysis process. At the same time, the massive amount of numbers in a company's financial statements can be bewildering and intimidating to many investors.

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Paul Barnes (1987): The Analysis and Use of Financial Ratios: A Review Article, Journal of Business Finance & Accounting , Vol. 14, No. 4, https://doi.org/10.1111/j.1468-5957.1987.tb00106.x .

B.N. Lalithchandraa, and Dr. N. Rajendhiranb (2021): Liquidity Ratio: An Important Financial Metrics, Turkish Journal of Computer and Mathematics Education , Vol. 12, No. 2 (2021), 1113–1114.

Alexandra Horobet, Stefania Cristina Curea, Alexandra Smedoiu Popoviciu, Cosmin-Alin Botoroga, Lucian Belascu, and Dan Gabriel Dumitrescu (2021): Solvency Risk and Corporate Performance: A Case Study on European Retailers, Journal of Risk Financial Management , Vol. 14, p. 536. https://doi.org/10.3390/jrfm14110536 .

Ana Perisa, Natasa Kurnoga, Martina Sopta (2017): Multivariate Analysis of Profitability Indicators for Selected Companies of Croatian Market, UTMS Journal of Economics , Vol. 8, No. 3, pp. 231–242.

Laurent Cantaluppi and Ruedi Hug (2000): Efficiency Ratio—A New Methodology for Performance Measurement, The Journal of Investing , Vol. 9, No. 2 (Summer 2000), pp. 19–25; https://doi.org/10.3905/joi.2000.319419 .

Amy Gallo (2015): A Refresher on Debt to Equity Ratio, Harvard Business Review , https://hbr.org/2015/07/a-refresher-on-debt-to-equity-ratio .

Terry D. Nixon, Greg Roth, and Andy Saporoschenko (2017): An Analysis of Operating Performance and Firm Characteristics Around Open Market Share Repurchases, Journal of Finance and Accountancy , https://www.aabri.com/manuscripts/09307.pdf .

John R. Mills and Jeanne H. Yamamura (1998): The Power of Cash Flow Ratios, Journal of Accountancy , https://www.journalofaccountancy.com/issues/1998/oct/mills.html .

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The financial leverage coefficient ratio is: ROE% / ROA%. A coefficient of more than 1 is considered positive.

Segment reporting is required for publicly-held entities, and is not required for privately held ones.

Grahame Steven (2006): Financial Management, September 2006, Papers P1, P2, and P3.

Meir Tamari (1066): Financial Ratios as a Means of Forecasting Bankruptcy, Management International Review , Vol. 6, No. 4 (1966), pp. 15–21.

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Barnes Paul (1987): The Analysis and Use of Financial Ratios: A Review Article, Journal of Business Finance & Accounting , Vol. 14, No, 4, https://doi.org/10.1111/j.1468-5957.1987.tb00106.x .

B.N. Lalithchandraa, and Dr. N. Rajendhiranb (2021): Liquidity Ratio: An Important Financial Metrics, Turkish Journal of Computer and Mathematics Education , Vol.12, No.2 (2021), 1113 – 1114.

Cantaluppi Laurent and Ruedi Hug (2000): Efficiency Ratio—A New Methodology for Performance Measurement, The Journal of Investing , Vol 9, No. 2 (Summer 2000), pp. 19–25, https://doi.org/10.3905/joi.2000.319419 .

Gallo Amy (2015): A Refresher on Debt-to-Equity Ratio, Harvard Business Review , https://hbr.org/2015/07/a-refresher-on-debt-to-equity-ratio .

John R. Mills and Jeanne H. Yamamura (1998): The Power of Cash Flow Ratios, Journal of Accountancy, https://www.journalofaccountancy.com/issues/1998/oct/mills.html .

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Felix I. Lessambo

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Lessambo, F.I. (2022). Financial Ratios Analysis. In: Financial Statements. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-15663-2_17

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Published : 01 November 2022

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