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Financial Ratio Analysis
Below is The Required Data Set and Graphs for Analysis.
Below Doc File Shows Task executed on Above Data Set
Learnings
From the statistical analysis of Current Ratio, Quick Ratio, and Cash Ratio, we can draw the following key insights:Mean and Standard Deviation Analysis
The Current Ratio and Quick Ratio have negative mean values, indicating that, on average, they are below a neutral threshold.
The Cash Ratio has a positive mean, suggesting a relatively stable liquidity position.
The standard deviations are significantly high, implying substantial variability in these financial ratios over time.
Probability Bounds Using Chebyshev’s Inequality
The upper bound probability estimates suggest that deviations beyond a certain range from the mean are at most 39.39% for the Current Ratio and 17.65% for the Quick Ratio.
The lower bound probabilities indicate that the ratios remain within a certain threshold at least 60.60% of the time for the Current Ratio and 82.35% for the Quick Ratio.
This means that, in the long run, these financial ratios will stay within a predictable range most of the time, helping in risk assessment.
To Conclude:
The results highlight significant fluctuations in financial ratios, particularly in liquidity metrics. While the Cash Ratio shows a relatively stable trend, the variability in Current and Quick Ratios suggests potential liquidity risks. Businesses or financial analysts can use these insights to anticipate financial stability concerns and make informed decisions to manage risks effectively.
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