Accounting

Accounting for Managers

More importantly, financial ratios are there due to the level that is divided by a financial flow itself which could be in the form of price or in simple plain accounting practices, the earnings. On the contrary, the financial ratios are also possible due to the flow that goes on to divide the same by a level that comprises of the return on equity or the earnings itself with respect to the equity. Now when we talk about the differences between the public sector organizations and that of the private sector we need to outline the exact stakeholders and investors who have one claim or the other within the said company’s shares and assets. For this to happen, one should comprehend that public sector organizations are open to accountability and audit in front of one and all but the private sector concerns are more or less within the four walls of the company, and their revenues, shares, and assets are not disclosed that easily. In fact, there is no provision whatsoever to discuss the liquidity basis and the like when the talk goes out loud of the financial reporting mechanisms related to the private sector organizations.In calculating financial ratios of a public or a private sector organization, one must fathom that the numerator or the denominator at any point in time might just be the ratio, remarked as the PEG ratio. This is quite true that in terms of financial ratios, the ratio analysis has got its due part in telling one and all about the whole category and as such the industry. On the other hand, there are a number of important pointers that one can pick with regards to the theory of ratios for that matter. Let us start with the financial ratios. These are the flags that in essence lay the foundation for showing those areas that can be remarked as the ones having strengths or weaknesses, both within the realms of the private and the public sector concerns. For this point in the case, even more, than one ratio can eventually be quite misleading.

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