Company HealthThe objective of ratio analysis is to determine the strengths and weaknesses of the financial aspect of a company, by measuring its liquidity, leverage, activity and its profitability. Using ratio analysis has several advantages as well as disadvantages. The disadvantages are the inability to compare companies from different industries, with accounting information affecting estimates and assumptions, leaving room for calculation errors. The advantages of using ratios are the ability to analyze trends comparing a company over a period of time, focusing on important information quickly and effortlessly.Liquidity RatiosCurrent Ratio: The trend of the current ratio for Masimo is on the decline: downward trend from 3.5 in 2011. to 2.6 in 2013. The ratio is mainly used to give an idea of ​​the company's ability to repay its short-term debts (debts and debts) with its short-term assets (cash, inventories, receivables). The higher the current ratio, the more capable the company is of paying its obligations. Usually, if a company has a quick ratio of 1.0 or lower, it is said to have liquidity problems. Therefore, if Masimo continues to reduce its current ratio, it may have difficulty meeting its debts. However, as of 2013, Masimo has been operating well.Quick Ratio: The quick ratio measures the dollar amount of liquid assets available for each dollar of current liabilities. So, a quick ratio of 1.5 means a company has $1.50 in liquid assets to cover every dollar of current liabilities. The higher the quick ratio, the better the liquidity position of the company. Also known as the “acid test ration” or “quick active ratio”. "Massimo's quick ratio, just like its current ratio, decreases from the middle of paper......e investments if they want to attract investors for big projects. In conclusion, Masimo is a healthy company with a few weaknesses Some ratios are not as important in the medical sector, for example inventory turnover is not as important because medical suppliers do not hold their stocks for long periods of time. Masimo's strengths lie in their. liquidity and their leverage Masimo is not highly leveraged and therefore has the ability to take on more debt to finance large asset investments Masimo is low in terms of return on assets and return on equity By. Compared to its competitor Masimo, Covidien LTD, Masimo has an equal ROA and a slightly lower ROE than Covidien LTD, which means they are using their assets and investments to their full potential. There is a lot of room for growth in this company provided it can profit from its assets and shareholder investments..