Ratio analysis

1,135 views

Published on

  • Be the first to comment

Ratio analysis

  1. 1. Ratio Analysis
  2. 2. RATIOS PROFITABILITY RATIOS CAPITAL TURNOVER IN RELATION TOSOLVENCY STRUCTURE (EFFICIENCY) SALES OTHER RATIOS RATIOS RATIOS RATIOS IN RELATION TO CAPITAL EMPLOYED
  3. 3. SOLVENCY RATIOS CURRENT RATIO=CURRENT ASSETSCURRENT LIABILITIES
  4. 4.  LIQUID RATIO/ QUICK/ ASID TEST RATIO=QUICK ASSETSQUICK LIABILITIESQUICK ASSESTS= CURRENT ASSETS- (STOCK+PREPAID)QUICK LIABILITIES= CURRENT LIABILITIES- BANK OD
  5. 5.  PROPRIETORY RATIO=PROPRIETOR’S FUNDS 100 *TOTAL ASSETS
  6. 6. CAPITAL STRUCTURE RATIOS DEBT-EQUITY RATIO= DEBT / EQUITY OR DEBT / DEBT+EQUITY
  7. 7. CAPITAL WITH FIXED RATE OF RETURN = preference shares + debentures +term loansCAPITAL NOT WITH FIXED RATE OF RETURN = equity shares + reserves andsurplusIndicates the long debts borrowings as a proportion to owned fundsWhen the ratio is more than 1 the capital is said to be highly gearedIt reflects trading on equity (means more is the equity more is the chance of raisingfinance by way of preference shares/ debentures/ long term loans)
  8. 8. TURNOVER/EFFICIENCYRATIO INVENTORY TURNOVER RATIO=COST OF GOODS SOLDAVERAGE STOCK
  9. 9.  INVENTORY VELOCITY=3. 365days/12months/52weeks inventory turnover ratio

×