Financial ratios analysis and companies' liquidity evaluation

Abstract

This study used financial ratio analysis to evaluate the companies' liquidity in the primary. One of the SME businesses has been chosen for evaluation based on the study of the data found on their financial statements. Since this statement contains the majority of the pertinent data for this purpose, it has been suggested that this company's cash flow statement be used for this purpose. The numbers showed that liquidity is as important as profit for attracting investors to purchase the company's shares because it provides confidentiality for the company, supporting the hypothesis that financial ratio analysis can help investors choose the company for purchasing their shares. More information has been proposed in this research.