When it comes to analyzing the financial performance indicators that are commonly used. Some of these indicators include profitability ratios, liquidity ratios, solvency ratios, and efficiency ratios. These indicators help assess the organization's profitability, ability to meet short-term obligations, long-term financial stability, and efficiency in utilizing its resources. It is fascinating how these indicators provide valuable insights into an organization's financial health! As described in the book Profitability Ratios measure how well a company can generate profit relative to revenue, equity, and assets. Common profitability ratios are the net profit margin, return on assets, and return on equity. Liquid Ratios assess a company's ability to pay off its short-term debts. The current ratio and quick ratio are popular examples. Solvency Ratios indicate a company's ability to meet long-term obligations and are crucial for long-term sustainability. The debt-to-equity ratio is a commonly used example of the Solvency ratio. Efficiency Ratios look at how effectively a company uses its assets and liabilities internally. Inventory turnover and accounts receivable turnover are part of efficiency ratios. Activity Ratios help understand how well a company manages its operational efficiency. Examples include the day's sales outstanding and asset turnover ratio. Market Value Ratios provide insight into