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Financial Ratios are the Financial Indicators that the entity use as the Key Financial Performance Indicators to measure the performance of those entity from financial perspective.
There are many different financial ratios used as the indicators and they are differently use based on the purpose of what areas, or risks that the appraiser concern about. Financial Ratios are the useful tool to measure that company performance financially; however, the Key Financial Performance Indicators turn to be less popular or they can not use alone to measure how success the entity is. We will talk in detail below why Financial Ratios is less popular in the Current Strategic Performance Appraisal.
http://www.financial-ratios.info/what-are-the-financial-ratios/
two financial ratios that are used in accounts receivables are, Current ratio and working capital ration,
Current ratio is used to determine the ratio between current assets and current liabilities.
Working capital is used to know the difference between current assets and current liabilities
