Financial Analysis tool containing all four types of ratios (liquidity ratio, capital structure or leverage ratio, turnover or activity ratio and profitability ratio)
It is an analysis of strength and weakness of an organisation by establishing the quantitative relation among the items of Balance Sheet or Income Statement of such an organisation
It is an analysis of strength and weakness of an organisation by establishing the quantitative relation among the items of Balance Sheet or Income Statement of such an organisation
its my first !
please #follow so that i will make more for all
it is according to class 12 syllabus ! hopefully it will weak students like me ! it contains all fundamentals of partnership firm.
it also usefull in xam times as revision notes!
for more just follow me !
fb@venuankush
class 12 / completeguide
its my first !
please #follow so that i will make more for all
it is according to class 12 syllabus ! hopefully it will weak students like me ! it contains all fundamentals of partnership firm.
it also usefull in xam times as revision notes!
for more just follow me !
fb@venuankush
class 12 / completeguide
A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Financial analysts use financial ratios to compare the strengths and weaknesses in various companies.[1] If shares in a company are traded in a financial market, the market price of the shares is used in certain financial ratios.
Ratios can be expressed as a decimal value, such as 0.10, or given as an equivalent percent value, such as 10%. Some ratios are usually quoted as percentages, especially ratios that are usually or always less than 1, such as earnings yield, while others are usually quoted as decimal numbers, especially ratios that are usually more than 1, such as P/E ratio; these latter are also called multiples. Given any ratio, one can take its reciprocal; if the ratio was above 1, the reciprocal will be below 1, and conversely. The reciprocal expresses the same information, but may be more understandable: for instance, the earnings yield can be compared with bond yields, while the P/E ratio cannot be: for example, a P/E ratio of 20 corresponds to an earnings yield of 5%.
Values used in calculating financial ratios are taken from the balance sheet, income statement, statement of cash flows or (sometimes) the statement of retained earnings. These comprise the firm's "accounting statements" or financial statements. The statements' data is based on the accounting method and accounting standards used by the organization.
Ratios
Profitability ratios
Liquidity ratios
Activity ratios (Efficiency Ratios)
Debt ratios (leveraging ratios)
Market ratios
Capital budgeting ratios
Financial ratios quantify many aspects of a business and are an integral part of the financial statement analysis. Financial ratios are categorized according to the financial aspect of the business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt.[2] Activity ratios measure how quickly a firm converts non-cash assets to cash assets.[3] Debt ratios measure the firm's ability to repay long-term debt.[4] Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return.[5] Market ratios measure investor response to owning a company's stock and also the cost of issuing stock.[6] These are concerned with the return on investment for shareholders, and with the relationship between return and the value of an investment in company’s shares.
Financial ratios allow for comparisons
between companies
between industries
between different time periods for one company
between a single company and its industry average
This particular project is based on ratio analysis of Coca-Cola International. I have analyzed two years financial performance of Coke i.e. from 2011 to 2012. I hope my this effort will help other interested students.
Solved Cbse Class 12 Accountancy Full Project(Comprehensive Project, Ratio An...Dan John
I assure you that this project of mine will fetch you a very good score.
Good Luck!!
Go to the links below for the following...
Solved Comprehensive Project Cbse Class 12 Accountancy Project
http://www.slideshare.net/dankjohn/solved-comprehensive-project-cbse-class-12-accountancy-project
Solved Accounting Ratios with Balance Sheet(vertical) and Statement of Profit and Loss - Cbse Class 12 Accountancy Project
http://www.slideshare.net/dankjohn/solved-accounting-ratios-with-balance-sheetvertical-and-statement-of-profit-and-loss-cbse-class-12-accountancy-project
Solved Cash Flow Statements with Balance Sheet (vertical) and Notes to Accounts - Cbse Class 12 Accountancy Project
http://www.slideshare.net/dankjohn/solved-cash-flow-statements-with-balance-sheet-vertical-and-notes-to-accounts-cbse-class-12-accountancy-project
Ratios and Formulas in Customer Financial AnalysisFinancial stat.docxcatheryncouper
Ratios and Formulas in Customer Financial Analysis
Financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes in trends, and relationships and the investigation of the reasons underlying those changes. The judgment process can be improved by experience and the use of analytical tools. Probably the most widely used financial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the financial statement. Financial ratios are usually expressed in percentage or times. Generally, financial ratios are calculated for the purpose of evaluating aspects of a company's operations and fall into the following categories:
· Liquidity ratios measure a firm's ability to meet its current obligations.
· Profitability ratios measure management's ability to control expenses and to earn a return on the resources committed to the business.
· Leverage ratios measure the degree of protection of suppliers of long-term funds and can also aid in judging a firm's ability to raise additional debt and its capacity to pay its liabilities on time.
· Efficiency, activity or turnover ratios provide information about management's ability to control expenses and to earn a return on the resources committed to the business.
A ratio can be computed from any pair of numbers. Given the large quantity of variables included in financial statements, a very long list of meaningful ratios can be derived. A standard list of ratios or standard computation of them does not exist. The following ratio presentation includes ratios that are most often used when evaluating the credit worthiness of a customer. Ratio analysis becomes a very personal or company driven procedure. Analysts are drawn to and use the ones they are comfortable with and understand.
1. Liquidity Ratios
Working Capital
Working capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncertainties. A high working capital balance is mandated if the entity is unable to borrow on short notice. The ratio indicates the short-term solvency of a business and in determining if a firm can pay its current liabilities when due.
Formula
Current Assets - Current Liabilities
Acid Test or Quick Ratio
A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities. The primary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a business's quick ratio will be lower than its current ratio. It is a stringent test of liquidity.
Formula
Cash + Marketable Securities + Accounts Receivable
Current Liabilities
Current Ratio
provides an indication of the liquidity of the business by comparing the amount of current assets to current liabilities. A business's curren ...
Ratio AnalysisFinancial ratios can be used to examine various as.docxcatheryncouper
Ratio Analysis
Financial ratios can be used to examine various aspects of the financial position and performance of a business and are widely used for planning and control purposes.
They can be used to evaluate the financial health of a business and can be utilised by management in a wide variety of decisions involving such areas as profit planning, pricing, working-capital management, financial structure and dividend policy.
Ratio analysis provides a fairly simplistic method of examining the financial condition of a business.
A ratio expresses the relation of one figure appearing in the financial statements to some other figure appearing there.
Ratios enable comparison between businesses.
Differences may exist between businesses in the scale of operations making comparison via the profits generated unreliable.
Ratios can eliminate this uncertainty.
Other than comparison with other businesses, it is also a valuable tool in analysing the performance of one business over time.
However useful ratios are not without their problems.
Figures calculated through ratio analysis can highlight the financial strengths and weaknesses of a business but they cannot, by themselves, explain why certain strengths or weaknesses exist or why certain changes have occurred.
Only detailed investigation will reveal these underlying reasons. Ratios must, therefore, be seen as a ‘starting point’.
Financial ratio classification
The following ratios are considered the more important for decision-making purposes:
Ratios can be grouped into certain categories, each of which reflects a particular aspect of financial performance or position.
The following broad categories provide a useful basis for explaining the nature of the financial ratios to be dealt with.
Profitability.Businesses come into being with the primary purpose of creating wealth for the owners. Profitability ratios provide an insight to the degree of success in achieving this purpose. They express the profits made in relation to other key figures in the financial statements or to some business resource.
Efficiency.Ratios may be used to measure the efficiency with which certain resource have been utilised within the business. These ratios are also referred to as active ratios.
Liquidity.It is vital to the survival of a business that there be sufficient liquid resources available to meet maturing obligations. Certain ratios may be calculated that examines the relationship between liquid resources held and creditors due for payment in the near future.
Gearing.This is the relationship between the amount financed by the owners of the business and the amount contributed by outsiders, which has an important effect on the degree of risk associated with a business. Gearing is then something that managers must consider when making financing decisions.
Investment.Certain ratios are concerned with assessing the returns and performance of shares held in a particular business.
Profitabi ...
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
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Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
2. Ratio Analysis is a form of Financial Statement Analysis that is
used to obtain a quick indication of a firm's financial
performance in several key areas.
Lets see how it is calculated and what the objective of this
calculation is ?
a. Calculation basis
A relationship expressed in mathematical terms
Between two individual figures or group of figures
Connect with each other in some logical manner
Selected from financial statements of the concern
RATIO ANALYSIS
3. Objective for financial ratios is that all the stakeholders
(owners, investors, lenders, employees etc.) can draw
conclusion about the
Performance(present, past and future)
Strength & weaknesses of a firm
Can take decisions in relation to firm
OBJECTIVE:
4. The ratios can be classified into the following four broad
categories :
i. Liquidity Ratios
ii. Capital Structure/Leverage Ratios
iii. Turnover or Activity Ratios
iv. Profitability Ratios
TYPES OF RATIOS
5. These are those ratios which are computed to evaluate
the capacity of the entity to meet its short term
liabilities. Commonly used liquidity ratios are :
a. Current Ratio
b. Quick Ratio
c. Absolute Liquidity Ratio
LIQUIDITY RATIOS
6. Most common measure of short-term liquidity also known as
the working capital ratio because net working capital is the
difference between current assets and current liabilities
Where,
Current Assets = stock + sundry debtors + cash and bank +
Receivables + Disposable investments + Loan & Adv.
Current Liabilities = Creditors + Short Term Loans + Overdraft
+ Outstanding Exps. + Prov. For tax + Unclaimed dividend
CURRENT RATIO
Current Ratio =
Current Assets
Current Liabilities
Ideal 2 : 1
7. The Quick ratio is sometimes called as the “acid” test ratio
and is one of the best measure of liquidity.
Quick Ratio =
Quick Assets
Current Liabilities
Where,
Quick Assets = Current Assets − Inventories
Current Liabilities = As discussed in current ratio
QUICK RATIOS
Ideal 1 : 1
8. The absolute liquidity ratio measures the absolute liquidity of the
business. This ratio only considers the absolute liquidity available
with the firm.
Absolute Liquidity Ratio =
Cash + Marketable Securities
Current Liabilities
Where,
Marketable Securities = These are financial instruments that can
be easily converted to cash such as government bonds, common
stock or certificates of deposit.
ABSOLUTE LIQUIDITY RATIO
Ideal 0.5 : 1
9. Capital structure/leverage ratio may be defined as those
ratios which measure the long term stability and structures of
the firm.
a. Debt Equity Ratio
b. Proprietary Ratio
c. Capital Gearing Ratio
d. Fixed Asset Ratio
CAPITAL STRUCTURES/LEVERAGE
RATIOS
10. This ratio reflects the long-term financial position of a firm
and is calculated in the form of relationship between
external equities or outsider funds and internal equities or
shareholders fund.
Debt-Equity Ratio =
Debt
Equity
Where,
Debt = Debentures + Loans + Other long term liabilities
Equity = Eq. share capital + Pref. share capital + Reserve &
surplus
DEBT EQUITY RATIO
Ideal 2 : 1
11. This ratio indicates the relationship between proprietor’s
fund and total assets
Proprietary Ratio =
Shareholder′s fund
Total Assets
Where,
Shareholders fund = Eq. share capital + Pref. Share capital +
reserve and surplus – (Loss + Fictitious Asset)
PROPRIETARY RATIO
Ideal 1 : 3
12. This ratio establishes the relationship between fixed cost
bearing capital.
Capital Gearing Ratio =
Eq. share capital+Reserve & surplus
pref.capital+Int. Bearing Finance
Where,
Interest Bearing Finance = Debentures + Long Term Loan
CAPITAL GEARING RATIO
13. This ratio specifically measures how able a company is to
generate net sales from fixed-asset investments, namely
property, plant and equipment, net of depreciation.
Fixed Asset Ratio =
Net Fixed Asset
Shareholders fund+Long Term Liability
Where,
Net Fixed Asset = Total Fixed Asset – Depreciation
FIXED ASSETS RATIO
Ideal >1
14. These ratios are employed to evaluate the efficiency with
which the firms manages and utilizes its asset. For this reason,
they are often called as ‘Asset management ratio’.
a. Stock Turnover Ratio
b. Debtor Turnover Ratio
c. Creditor Turnover Ratio
d. Working Capital Turnover Ratio
TURNOVER OR ACTIVITY RATIOS
15. This ratio is also known as inventory turnover ratio. This ratio
establishes relationship between cost of goods sold during a
given a period and the average amount of inventory carried
during that period.
Stock Turnover Ratio =
Cost of goods sold
Average Stock or Inventory
Where,
Cost of Goods Sold = Sales – Gross Profit
Average Inventory = (Opening Stock + Closing Stock)/2
STOCK TURNOVER RATIO
16. This ratio is also known as Receivables Turnover Ratio. It
establishes relationship between net credit sales and average
debtors of the year.
Debtor Turnover Ratio =
Net Credit Sales
Average Debtors
Where,
Net Credit Sales = Sales ― Cash ― Sales Return
Average Debtors =
Opening Debtors +Closing Debtors
2
DEBTOR TURNOVER RATIO
17. This ratio indicates the number of times the payables rotates in
a year or the velocity with which the payment for credit
purchases are made to creditors.
Creditor Turnover Ratio =
Net Credit Purchase
Average Creditors
Where,
Net Credit Purchases = Total Purchases ― Cash Purchases ―
Purchases Return
CREDITOR TURNOVER RATIO
18. This ratio indicates the velocity of the utilization of net
working capital. In other words it indicates the number of
times the Working capital is rotated in coarse of a year.
Working Capital Ratio =
Cost of Goods Sold
Working Capital
Where,
Working Capital = Current Assets ― Current Liabilities
WORKING CAPITAL TURNOVER RATIO
19. The profitability ratios measures the profitability or the
operational efficiency of the firm. They are some of the most
closely watched and widely quoted ratios.
a. General profitability Ratio :
I. Gross Profit Ratio
II. Net Profit Ratio
III. Operating Profit Ratio
PROFITABILITY RATIOS
20. b. Overall Profitability Ratios :
I. Return on Equity
II. Return on Capital Employed
III. Return on Proprietor Fund
PROFITABILITY RATIOS
21. It is also called as ‘Gross Profit Margin’. This ratio establishes
relationship of gross profit to net sales of the firm. This ratio is a
indicator to the adequacy of selling price and efficiency of trading
activities.
Gross Profit Ratio =
Gross Profit x 100
Net Sales
Where,
Net Sales = Total Sales ― Sales Return
Gross Profit = Sales ― Cost of Good Sold
GROSS PROFIT RATIO
22. It measures overall profitability of the business. Net Profit
Ratio finds the proportion of revenue that finds its way into
profits.
Net Profit Ratio =
Net Profit X 100
Sales
Where,
Net Profit is derived by deducting admin. Exps, selling Exps,
finance charges, etc from Gross Profit
NET PROFIT RATIO
23. Operating Profit measures the percentage of each sales in
rupees that remains after the payment of all cost and
expenses except for Interest and Taxes.
Operating Profit Ratio =
Operating Profit X 100
Sales
Where,
Operating Profit = Earning before interest and taxes.
OPERATING PROFIT RATIO
24. Return on Equity measures the profitability of equity funds
invested in the firm. This ratio reveals how profitability of the
owner’s fund has been utilized by the firm.
R.O.E =
Net profit
Equity Shareholder′s Funds
X 100
Where,
Shareholder’s Funds = Equity Capital + Reserves and
surplus – Accumulated Losses.
RETURN ON EQUITY
25. It is the most important ratio of all. It is the percentage of
return on funds invested in the business by it’s owner’s.
R.O.C.E =
Net Profit
Capital employed
X 100
Where,
Capital Employed = Total Assets – Current Liabilities.
RETURN ON CAPITAL
EMPLOYED
26. This ratio is also known as return on net worth and it
determines the earning capacity related to owner’s capital.
R.O.P.F =
Net Profit
Shareholders Fund
X 100
Where,
Shareholders Fund = Equity Share Capital + Preference Share
Capital + Reserves and Surplus – Accumulated Loss and
Fictitious Assets.
RETURN ON PROPRIETOR
FUND
27. Diversified product lines.
Financial data are badly distorted by inflation.
Seasonal factors may also influence financial data.
To give a good shape to the popularly used financial ratio.
Differences in accounting policies and accounting period.
It is very difficult to generalize weather a particular ratio is
good or bad.
LIMITATION OF RATIO ANALYSIS