Profitability and liquidity ratios

IB Business Management: Profitability and liquidity ratios

This section of the IB Business Management syllabus examines both profitability ratios and liquidity ratios (AO2, AO4), as well as possible strategies to improve these ratio (AO3).Ratio analysis is a quantitative management planning and decision-making tool, used to analyse and evaluate the financial performance of a business. These can be further categorised as profitability, liquidity and efficiency ratio analysis.


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