Importance Of Financial Ratios

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It is one of the important tools to analyze the financial status of a company. It is essentially concerned with the calculation of relationships which after proper identification and interpretation may provide information about the operations and state of affairs of a business enterprise. The analysis is used to provide indicators of past performance in terms of critical success factors of a business. This assistance in decision-making reduces reliance on guesswork and intuition and establishes a basis for sound judgment. There are various ratios (financial ratios) like profitability ratios, Liquidity ratios, Solvency Ratios and Activity Ratios. All these ratios are calculated by utilizing different figures from the financial statements of a company. But the importance of ratios varies from industry to industry. For example, CD ratio or Credit to Deposit ratio is very important for banks but might not be important for a manufacturing industry or might be of no use for it. The ratios which are mainly dealt with for ICICI Bank are:  Capital Adequacy ratio  Earnings Ratios  Profit...

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