How can we determine the relative importance of cyclical values in the balance sheet?

The best Way to determine The relative importance of cyclical values in the balance sheet is using ratio analysis. The following ratio analysis will help us

Receivables Turnover Ratio

Asset Turnover Ratio

Cash Conversion Cycle

Cash Ratio

Current Ratio

Debt Ratio

Debt Service Coverage Ratio

Debt to Asset

Debt to Equity Ratio

Dividend Payout

Dividend Yield

DuPont Analysis

Earnings per Share

Equity Ratio

Fixed Asset Turnover

Interest Coverage Ratio

Internal Rate of Return

Inventory Turnover Ratio

Loan to Value

Net Working Capital

Payables Turnover Ratio

Payback Period

Quick Ratio - Acid Test

Working Capital Ratio

Ratio analysis methodology can be used to determine the relative importance of cyclical values in the balance sheet

The use of common size vertical balance sheet to check relative changes over time for components of working capital (and the transfer of non current assets to current assets affect firm overall effecincy and the quality of earnings) cyclical values  in recivables,  inventory and payables affects earning quality 

By Ratio analysis methodology

Their importance can be determined through the use of ratio analysis of a common size vertical balance sheet, vis-a-vis changes in working capital elements of a cash flow analysis(cash flow from operations).

These affect the earnings ratio of a company.

We can use the retio analisis and can compare the values with similer comoanies and can compare the values with previous years.

We can determine the relative importance of cyclical values in the balance sheet Financial Ratio Explanations

To apply the relative importance of cyclical values in the balance sheet is using Ratio, financial, historical and trend analysis

A comprehensive ratio anlayis on the balansheet items will help us determine the relative importance of the Cyclical values

A comprehensive ratio anlayis on the balansheet items will help us determine the relative importance of the Cyclical values.

Particalurly, items that are classified under Current Assets Current libilitiess, eg Current ratio , Liquidity ratio , Acid test ratio, Debtor turn over ratio etc.They give a clear status of the cyclical values of an Organisation.

BY ANALYSING AND USING RATION ANALYSIS AND GRAPHS, CHARTS .