Managing Finance Research Paper Example | Topics and Well Written Essays - 3500 words

Managing Finance - Research Paper Example Ratio analysis is the significant tool for investigating the financial performance of the company. It helps in analyzing the financial statements and the accounting ratios assist in knowing the company’s financial position. The ratios are also essential for evaluating the efficiency of the company in relation to its management and operations. On the basis of the ratio analysis, companies formulate their future plans. By doing the analysis of different ratios, companies come to know how well they are performing as compared to previous years as well as to its competitors (Khan and Jain, 2007). The profitability ratios signify whether the business assets are being utilized effectively in order to generate reasonable revenue. The liquidity ratios assist in determining whether the organization is capable of fulfilling the financial requirements in short term. The efficiency ratios signify the level to which the assets have been capable of creating sales. Financial leverage ratios s crutinize the financial construction of the company. Investment ratios assist the investors to make their critical decisions. A numerical investigation is carried out by calculating different ratios such as profitability, liquidity, efficiency, investment, financial, and cash flow ratios as well as on the Z-Score to recognize the performance of both the companies for the year 2012 and 2013. The numerical investigation shows that Ooredoo Telecom is considered as the more liquid company while the profitability ratios of Zain Telecom are higher.