This publication is available in an enhanced digital version and PDF.
In this publication we cover the basics of using ratio analysis to analyze financial statements. There are three main financial statements that need to be understood to evaluate the financial condition, profitability, and cash flows of any organization: the balance, the income, and the cash flow statements. In this publication, we will cover the fundamental concepts to construct and analyze these critical financial statements. Examples of each group of ratios are provided. The paper also presents a set of exercises to help the reader understanding, applying, and evaluating the materials.
Virginia Cooperative Extension materials are available for public use, reprint, or citation without further permission, provided the use includes credit to the author and to Virginia Cooperative Extension, Virginia Tech, and Virginia State University.
Issued in furtherance of Cooperative Extension work, Virginia Polytechnic Institute and State University, Virginia State University, and the U.S. Department of Agriculture cooperating. Edwin J. Jones, Director, Virginia Cooperative Extension, Virginia Tech, Blacksburg; M. Ray McKinnie, Administrator, 1890 Extension Program, Virginia State University, Petersburg.
May 10, 2019