There are many reasons why the use of ratio analysis will benefit Alpha Ltd

Ratio analysis is  the 1) Single most important  of  in which  are converted into ratios for meaningful comparisons, with past ratios and ratios of other firms in the same or different . Ratio analysis determines  and exposes  or weaknesses of a firm.

There are many reasons why the use of ratio analysis will benefit Alpha Ltd. Ratio analysis  simplifies the financial statements and helps in comparing companies of different size with each other. In addition, ratio analysis helps in trend analysis which involves comparing a single company over a period. And lastly, it can highlights important information in simple form quickly; Alpha Ltd can explore their business performance by just looking at few numbers instead of reading the whole financial statements.

There are many internal stakeholders who will be interested in Alpha Ltd ratio analysis.2) Internal Stakeholders are anyone within the business such as managers, employees and shareholders. Managers will be interested in Alpha Ltd ratios because they can make use of business ratio to see if they are meeting their business objectives and using their resources effectively ; this will then allow them to highlight where they may need improving. In addition, employees will make use of the ratio to see if the business is stable and their jobs are safe. Also to make sure they are receiving a far pay in comparison of the business performance, and if they are not, they may be able to ask for a pay rise. Lastly, Shareholders will use the business ratio to make sure they are gaining the right dividends and if they are not, they may request a fairer share. Furthermore, there are external stakeholders. 3) External stakeholders are people outside a particular  who is affected by its  or , these include creditors, the government and competitors. Creditors will be interested in Alpha Ltd ratio analysis because they will use the ratios to see how much the business are earning and will know if they will be able to pay the bills. Moreover, the government will be interested because they will look at the ratios to set the corporation tax which depends on profits. Finally, Competitors will look at the ratios to see how the business are doing and they will draw up comparison to try to compete to get better profits.