The purpose of ratio analysis is that it conducts proper analysis of financial statements. The financial institutes, banks, etc are able to make decision based on the financial situation of the company. The efficiency of the company works upon the management and operations shown by profits and assets earned by the same. The performance of the company is evaluated and compared for the past years and present time period.
The concept of time value of money is defined as the evaluation of the worth of money at the present to be similar or more than that in the future peiod of time. It is also known as present discounted value and shows that the interest is earned for the money deposited for a fixed period of time.
The understanding of time value of money is important because it helps in evaluating the present value of cash flow. It also evaluates the value of the asset taking place in future. It works in conducting capital budgeting, stock valuation, etc. It shows future value by evaluating the funds received about the investment made in present time period for future.
The purpose of ratio analysis is that it conducts proper analysis of financial statements was first posted on July 9, 2019 at 7:54 pm.
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