If a company Actual Return on Assets= -0.91% , Budget ROA= 0.59%

Actual Profit Margin= -8% , Budget Profit Margin= 3.7%

(compare against competitors and other industries ratio: Domino's ROA=0.1%, Domino's profit margin=0.12%)

Ratio Analysis is used to assess:

the financial health of a business

to compare current performance with past performance and

to compare against competitors and other industries

Common categories of ratio analysis a business may perform monthly include:

Evaluating the ability to pay current liabilities (liquidity)

Evaluating the ability to sell inventory and collect receivables

Evaluating the ability to pay long-term debt (solvency)

Evaluating profitability