The group of general performance ratios allows for preliminary verification whether the structure of liabilities is correctly matched with the structure of assets and consequently whether the overall standing of the company is good.
The most important ratios belonging to this group are the golden balance and finacial rules, which are used to assess the sufficiency of long-term capitals with respect to the base of fixed assets, providing the foundation for company's stability in the long run. The balance sheet analysis in the context of assets and capitals relations allows to verify the financial potential of the company, at the time of business startup and also in further periods of operation.
Each balance sheet analysis, conducted according to the generally accepted methodology, uses partial ratios which allow to identify the factors, directly influencing the final results of the assessment and having impact on the financial standing of the company. Basing on the partial ratios one may determine the value of the synthetic ratio of financial stablility, whose increase clearly indicates an improvement of financial stability, while the decrease indicates stability deterioration.
Balance sheet analysis should be repeated periodically. It will allow to verify the correctness and effectiveness of the company's financial strategy and - if necessary - to introduce some changes and modifications to the current development strategy of the company, including also the financial aspects of its operation.
The list of general performance ratios is shown below. By browsing through the list, you may learn the scope of the assessment and the areas in which the balance sheet analysis can provide useful information being the basis of decision making process in the company (from the retrospective and prospective point of view).