Financial statement analysis focuses primarily on isolating information that is useful for making a particular decision for both internal and external users. Internal investors, such as executives or managers, may perform this process to make internal decisions such as capital budgeting. External users, such as creditors or investors, may use this process to take decisions such as offering credit or investing in your business.
Respond to the following:
List 3 ratios used for analysis and describe how each can be used in decision-making by internal or external users.
Are financial ratios enough to make internal or external decisions related to a company? State why.