STRATEJİ360 Financial Ratio Scenario Analysis
Financial ratio analysis is vital for businesses as it assesses the financial health of a company, determining how strong it is in fundamental areas such as liquidity, profitability, and debt structure. Investors, lenders, and managers rely on financial ratios to understand a business’s performance and evaluate its future potential. It allows tracking changes over time, monitoring the company's performance, and conducting competitive analysis. This analysis serves as a crucial reference point for securing external funding and evaluating competitive advantages. Potential investors and lenders utilize these ratios to gauge a company's financial condition, guiding businesses to make strategic decisions based on solid foundations.
Among these ratios, liquidity ratios measure a company’s ability to meet short-term obligations. For instance, the current ratio demonstrates a company’s ability to cover short-term liabilities with short-term assets, while the quick ratio assesses the ability to cover short-term liabilities with more liquid assets.
Profitability ratios measure a company’s profitability. The gross profitability ratio indicates the relationship between sales revenue and costs, whereas the net profitability ratio reveals how much profit the company makes after deducting all expenses.
Debt ratios examine a company’s debt structure. The equity ratio shows the company's ability to finance its obligations with its own equity, while the debt ratio calculates the total debt relative to equity.
These analyses are critical for understanding a company's financial health and predicting future performance. Financial ratios guide decision-making processes, aid in identifying strengths and weaknesses, and inform strategic planning.
In STRATEJİ360, Financial Ratio Scenario Analysis is prepared considering sector dynamics. The analysis, crafted based on the Central Bank data, compares businesses' results with the 10-year sector averages, offering companies the opportunity to compare their financial standing within their industry.
In application, data from all balance sheets and financial reports are not required. Only the data necessary to calculate the rates is entered. Different scenarios can be evaluated by updating the entered data.
While you can easily report the financial health of your business with STRATEJİ360 financial ratio scenario analysis, you can increase your financial literacy with the resulting comments.
