The document defines and provides formulas for 33 different types of profitability, turnover, and solvency ratios used to evaluate the financial performance and position of a business. The ratios measure things like return on investment, assets, and equity; inventory turnover; debt collection periods; liquidity; and leverage. Calculating these ratios involves using figures from the income statement, balance sheet, and other financial statements.

1. PROFITABILITY RATIOS
1.Return on investment (%) =
(Operating profit / capital employed) × 100
2.Return on shareholders funds (%)=
(net profit after interest and tax / shareholders fund )
x 100

2. 3)Return on equity share holders fund =
(net profit after interest , tax and pref. dividend/
equity shareholders fund) x 100
4) Return on total assets =
( net profit after tax + interest / total assets –
fictions assets ) X 100
5) Gross profit ratio = (Gross profit / net sales) x 100

3. 6. Operating profit ratio =
(operating profit/ net sales) x 100
7. Operating ratio =
(Cost of goods sold + operating expenses / net sales) x
100
8. Expenses ratio =
( specific expenses / net sales ) x 100

4. 9) Net profit ratio =
(Net profit after tax / net sales ) x 100
10) Earning per share =
(net profit after tax and preference dividend/
no. of equity shares)
11) Price earnings ratio =
( market price per equity share / earning per equity
shares )

5. 12) Pay out ratio =
( equity dividend / net profit after tax and pref.
dividend) x 100
(or)
( dividend per equity share / earning per equity
share ) x 100
13) Retained earnings ratio =
( retained earnings / net profit after tax and pref.
dividend ) x 100

6. 14) Interest cover ratio / fixed charges cover
ratio =
(Profit before interest and tax/ fixed interest
charges)
15) Dividend yield ratio =
(dividend per share/market price per share) x
100

7. TURNOVER RATIOS
16) Inventory turnover ratio =
( cost of goods sold / average inventory)
17) Inventory turnover period =
( days or months in the year / inventory turnover
ratio )

8. 18) Debtors turnover ratio =
( net credit sales / average receivables)
19) Debtors collection period =
( days or month in the year / debtors turnover
ratio)
20) Creditors turnover ratio =
(Net credit purchases / average accounts payable)

9. 21) Average payment period =
(Days or months in the year / creditors turnover ratio)
22) Working capital turnover ratio =
(cost of sales or sales / net working capital)
23) Fixed asset turnover ratio =
(cost of goods sold / net fixed assets)
or
(sales / net fixed assets)

10. 24) Capital turnover ratio =
(sales or cost of sales / capital employed)
25) Owned capital turnover ratio =
(sales or cost of sales / shareholder’s funds)

11. SOLVENCY OR FINANCIAL RATIOS
SHORT TERM SOLVENCY RATIOS :
26) CURRENT RATIO =
( CURRENT ASSETS / CURRENT LIABILITIES)
27) LIQUID RATIO (OR) QUICK RATIO =
( LIQUID OR QUICK ASSETS /
CURRENT LIABILITIES)
28) CASH POSITION RATIO =
(CASH AND BANK BALANCE + MARKETABLE
SECURITIES/ CURRENT LIABILITIES)

12. LONG TERM SOLVENCY RATIO:
29) Fixed asset ratio =
(Fixed assets / long term funds)
30) Debt equity ratio =
(Total long term debt / shareholders funds)
(or)
(External equities / internal equities)
31) Proprietary ratio =
(Shareholders fund / total tangible assets)

13. 32) Capital gearing ratio =
( long term loans + debentures + pref. capital /
equity shareholders funds)
Overall solvency ratio:
33)Solvency ratio=
(Total debt / total tangible assets)