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“It’s better to prepare and prevent than repair and repent”. This holds true in every aspect of our life and more so in the case of business life which is marked with uncertainty thanks to the myriad environmental pressures it has to face. High rates of firms are being flushed out of business before they can even say the words “Where are we going wrong”. The need of the hour is predicting business failure. Fortunately, financial ratio analysis comes to the rescue. It’s a tool which provides cues of the underlying business conditions and helps in getting behind the numbers to get the real picture of a company.

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