Certified Fraud Examiner Practice

Effective ratio analysis primarily focuses on evaluating a company’s financial statements to gauge its performance and viability. It involves the use of various financial ratios, such as liquidity ratios, profitability ratios, and leverage ratios, to assess aspects like operational efficiency and financial health.

By analyzing these ratios, stakeholders can identify trends over time, compare performance against industry benchmarks, and understand how well the business is performing relative to its financial goals and market standards. This valuable insight supports informed decision-making regarding investments, operational adjustments, and strategic planning.

The other options, while important in their own contexts, do not directly stem from financial ratio analysis. Understanding employee satisfaction and evaluating customer feedback concern qualitative measures that do not rely on financial metrics, whereas determining market trends in advertising involves market analysis rather than financial performance metrics. These areas pertain to organizational performance and market dynamics but fall outside the direct application of ratio analysis.