Tag: management ratio

Management ratios are used as a practical means of assessing the quality of financial management, therefore identifying whether financial management is recognised as becoming either less or more efficient. The three main categories of management ratios include: Cost and profitability ratios Working capital ratios Productivity ratios What are Cost and Profitability Ratios Cost and profitability ratios are a means of looking at the effectiveness of the way costs are being managed in relation to the turnover that has been achieved. This approach allows one to look at both movements and relationships between income, profit and costs. Changes in result may then be utilised in order to obtain a comparative analysis between periods of time such as months or years. The methods...