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Operating income margin

Operating income margin has close relations with Earnings before interest and taxes (EBIT). While operating income margin is calculated by using operating income, which consists of operating expenses and depreciation, EBIT is calculated using operating expenses only. Sometimes, if the depreciation in the company is very low EBIT can be used as operating income when calculating Operating income margin.

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Liquidity risk

Liquidity risk - can occur if the company is not managing its current assets appropriately. This risk is very important because it is pointed at short term obligations that should be paid or fulfilled in short term period.

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Financial report analysis

Financial report analysis - is a useful form of finding the real situation in the company. Objective assessment of the company’s financial statements helps managers and investors to see a clear picture and situation in the company. To make an analysis usually balance sheet and income statement are used for the period of twelve months of the same year.

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Key financial ratios

Key financial ratios - are used to evaluate the financial performance of the company. Financial ratios are used when we know the structure of the assets, liabilities and equity from the balance sheet and when we know sales and expenses from the income statement.

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