Before investing in a company’s shares, a smart investor asks one fundamental question:
Is this business worth my money at this price?
Financial ratios help answer that question. They convert complex financial statements into clear signals about profitability, risk, and valuation.
Financial failure rarely happens overnight. In most cases, the warning signs are visible well before a company collapses hidden quietly in its balance sheet. While profit and loss statements often get the spotlight, it is the balance sheet that reveals structural weaknesses, funding stress, and survival risks.
When we talk about the financial health of a company, we’re really asking a simple question: Is this business strong enough to survive today and grow tomorrow?
Whether you are an investor, a business owner, a lender, or a student of finance, understanding how to assess financial health helps you make better, safer decisions.
