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Chapter 18

Interpretation of financial statements

Outcome

By the end of this session you should be able to:

 explain the purpose of interpretation of ratios

 calculate and interpret basic accounting ratios dealing with profitability, liquidity,
efficiency and financial position

 explain the interrelationships between ratios

 draw conclusions from the information contained within the financial statements

and answer questions relating to these areas.

The underpinning detail for this Chapter in your Notes can be found in
Chapter 20 of your Study Text

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