Following on from the final accounts topic, ratio analysis helps shareholders, lenders and managers make sense of final accounts in order to make the most informed financial decisions for the future. Ratio analysis is divided into different categories for different purposes. Profitability ratios investigate the levels of profit being made by the business, whereas liquidity ratios help the reader understand the ability of the business to pay its short-term debts. There are also several efficiency ratios. All students will learn how to calculate and interpret 5 main ratios, with Higher Level students using a further 4 efficiency ratios.