In this lesson I cover:
Profitability:
- The concept and importance of profitability
Liquidity: - The concept and importance of liquidity
- How to interpret the financial performance of a business by calculating and analysing profitability ratios and liquidity ratios:
- Gross profit margin
- Profit margin
- Return on Capital Employed
- Current ratio
- Acid test ratio
Why and how accounts are used: - Needs of different users of accounts and ratio analysis
- How users of accounts and ratio results might use information to help make decisions, e.g. whether to lend to or invest in the business
I have also created a task students to help students remember the main outcomes of this lesson.
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