Economics - Investment

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Financial Ratios

Financial ratios for small business will include ratios which compare the solvency of the company and are more concentrated on the cash availability to the small business. The three basic ratios which needs to be considered by a small firms will include

Accounts receivable days

When Accounts Receivable Days increase, the cash is eventually tied up in receivable of the company, thus affecting the cash available to the company by which it will payout its expenses.

Debt to asset

The debt to asset ratio for a smaller company depicts the amount of debt supported by a company's assets.

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