Ratio analysis is defined as the systematic use of ratio to interpret the financial statements so that the strengths and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The use of ratios as a financial analysis tool was suggested by Alexander Wall, a German scholar, way back in 1919. Since then, it has become a very useful and powerful tool for analysis and interpretation by both the internal and the external parties of business enterprise. The present research measures the financial performance of Indian Hotel Company Ltd. through ratio analysis of 10 ratios. The chi-square test was used for testing the hypothesis and the research paper provides some important findings and suggestions to the company for better performance.

The analysis of financial statement is the systematic numerical calculation of the relationship of one fact with the other to measure the profitability, operational efficiency and growth potential of the business. Thus, the analysis of financial statement is basically a study of the relationship among various financial facts and figures given in the financial statement.

In financial management, various tools are available for analysis of financial statements. Among this, ratio analysis is a very powerful analytical tool useful for measuring the performance of an organization. It helps the management to analyze the past performance of the firm and to make further projections. Ratio analysis allows interested parties like shareholders, investors, creditors, government and analysts to revolutionize certain aspects of a firm’s performance. The calculation of ratios is relatively simple, but proper analysis and interpretation of the ratios can be made only by skilled analysts.

Management Research Journal, GPR, NPR, ROCE, Hypothesis Testing, DTR, FATR, TATR, Performance Measurement, Analysis of Ratios, Ratio Analysis, Indian Hotel Company Ltd..