1. The financial ratios used in ratio analysis technique are broadly categorized into the following four major categories:

• Liquidity Ratios

• Solvency Ratios

• Efficiency Ratios

• Profitability Ratios

1. Explain each of the above. Use each to give the ratio that is acceptable in business.

2. Explain how each of the following cost is use in business analysis and give two examples of each.

Fixed cost

Variable cost

Marginal cost