The most common tool is the use of ratio analysis which has four major categories: liquidity- which measures the ability to pay the bills;, solvency, -the financial situation over the long term ;activity or sometimes called efficiency ratios- how well the company manages inventor, accounts payable and accounts receivable and profitability ratio- which measures the success or failure of the company to increase owner's wealth.By converting numbers into ratios it becomes possible to measure different size companies or the same company overtime and directly compare the information . Of the four categories how would you use this information to monitor or measure your own company?