This lesson will help you to understand the difference between Working Capital and Capital Employed along with the different Accounting Ratios used to assess the profitability and liquidity of a business.
How To Carry Out This Lesson At Home:
Preparing the financial statements of a business enables us to have a good idea of the performance of a business. By simply looking at the ‘Net Profit/Loss’ is not always enough to make sensible management decisions for the future of the business. Accounting Ratios and percentages will help the owners of a business understand better how the business is performing and be able to take the necessary decisions at the right time. The handout contains several tasks that users need to complete. The power-point presentation that accompanies this handout will provide you with the answers for each of these tasks.