Ratio Analysis: It's like the "magic glasses" for business! Put them on, and you can see the hidden details about a firm's financial health. Think of it as the "X-ray" of a company’s financial statements.

• Evaluate a firm’s financial performance.
• Find trends over time.
• Identify the company’s strengths and weaknesses.
• Make meaningful comparisons with past figures or other businesses.

Imagine: You're deciding between two ice-cream parlors to invest your allowance in. One always has a long queue, but you hear that they’re in debt because they buy super-expensive ingredients. The other has fewer customers but seems to be smart with their money. Ratio analysis is like getting a sneak-peek into their cash registers and seeing which one’s really making more money and handling it better! 🍦💰