The financial information user uses ratio analysis measure the risk

Table 1

Quick ratio

Earnings per share

This is a measure of how much profit a company has generated. Companies usually report their earnings per share on a quarterly or yearly basis. The analyses of the table below reveal that earning per share has been declining from the year 2016 to 2017 and year 2017 to 2018.when the earning per share is rising it will attract more investors while it is very low it will tend to scare the investors.

Risks

The negative effects of ratio analysis have several effects on the economy. These are macroeconomics, the firm’s risk,andthe clientrisk. When the company experience liquidity difficulties it causes money circulation in the economy to be limited and thus it may lead to the effect of prices going high and thus leading to inflation. The firm may risk losing its customer base as a result of failing to pay creditors on time. Moreover, the firm may result from reducing the number of work force to cut its labor cost;this will lead to losing of employment.