The issue of financial ratios is none other than the one that has focused our attention on previous occasions: the key performance indicators or financial KPIs, the establishment of which must respond, in the first instance, to a detailed analysis of the real financial situation. of the organization. There is abundant information on the choice and implementation of financial indicators in the Balanced Scorecard (BSC) in this same blog; However, there are fewer references to its importance in the proportion of the comprehensive vision of the company that the use of the CMI offers, as a notable advantage, as well as the particular purposes of the different types of financial ratios that we can use for this purpose. . financial ratios Types and purposes of financial ratios Financial indicators or ratios fulfill a clear and specific purpose: quantify those key aspects for the organization's finances , and expose the results of the performance or performance of processes and activities related to them.
To achieve this purpose in the most complete way possible, the ratios or financial indicators present different typologies, which we can group into 5 large groups : Activity ratios : these are indicators that evaluate the organization's ability to India Part Time Job Seekers Phone Number List generate current assets (that is, monetizable or monetary) from non-current assets (not convertible into cash, at least during the current accounting year). Liquidity ratios : indicators that fulfill the mission of showing the organization's level of response capacity to debts through the cash economic resources it has. Market ratios : as their name indicates, they allow us to know the real state of the intentions of investors, shareholders and stakeholders, the effective investments made by them, and the possibilities of attracting new sources of investment through financial operations such as the offering of shares. , as well as their feasibility and costs.
Profit ratios : these are financial indicators that evaluate an organization's ability to generate profits or profits, providing information on the performance of activities aimed at managing the company's assets and controlling its level of expenses in line with the above. , to guarantee the maximum possible profit. Debt ratios : although organizations can commit to a certain extent to short and medium-term debts, without a doubt those that have the greatest consequences for their financial status are those incurred in the long term. And debt ratios or indicators are responsible for evaluating these debts that can compromise the future of the company, and measuring its possibilities to respond appropriately to it. As we see, all these indicators, in addition to offering relevant information about the (particular) financial status of the organization, also allow us to configure a more complete and comprehensive vision of it, if they are used together with the KPIs necessary to deepen the knowledge of the organization. organization from other perspectives. To expand this and other information related to financial indicators or ratios, we highly recommend reading the guide 12 good practices in financial reporting , a resource available completely free for download in the ebooks section of this blog.