Financial Ratio

A financial ratio is a metric derived from financial statements to evaluate performance and position.

Ratios include profitability, liquidity, efficiency, and leverage measures and help compare results over time or against industry benchmarks.

- Used in treasury and financial management for funding, investment, and risk decisions.
- Used to evaluate cash flows, financing costs, and capital structure.

- Example: Finance teams use **Financial Ratio** when planning funding needs and managing cash and risk.

- Why it matters: Supports liquidity and risk control and improves the quality of financing and investment decisions.