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    nikita sharma
    The document defines and explains various types of financial ratios used to analyze businesses, including liquidity ratios like current and acid-test ratios, turnover ratios like inventory and debtors turnover, leverage ratios such as debt-equity and debt-assets ratios, profitability ratios like gross profit and net profit ratios, and valuation ratios including EPS, P/E ratio, and dividend payout ratio. These ratios are calculated using information from a company's financial statements and are used to evaluate its operational efficiency, debt and liquidity levels, profitability, and stock valuation.

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    nikita sharma
    107 views2 pages
    The document defines and explains various types of financial ratios used to analyze businesses, including liquidity ratios like current and acid-test ratios, turnover ratios like inventory and debtors turnover, leverage ratios such as debt-equity and debt-assets ratios, profitability ratios like gross profit and net profit ratios, and valuation ratios including EPS, P/E ratio, and dividend payout ratio. These ratios are calculated using information from a company's financial statements and are used to evaluate its operational efficiency, debt and liquidity levels, profitability, and stock valuation.

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    The document defines and explains various types of financial ratios used to analyze businesses, including liquidity ratios like current and acid-test ratios, turnover ratios like inventory and debtors turnover, leverage ratios such as debt-equity and debt-assets ratios, profitability ratios like gross profit and net profit ratios, and valuation ratios including EPS, P/E ratio, and dividend payout ratio. These ratios are calculated using information from a company's financial statements and are used to evaluate its operational efficiency, debt and liquidity levels, profitability, and stock valuation.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    107 views2 pages

    Ratios All

    Uploaded by

    nikita sharma
    The document defines and explains various types of financial ratios used to analyze businesses, including liquidity ratios like current and acid-test ratios, turnover ratios like inventory and debtors turnover, leverage ratios such as debt-equity and debt-assets ratios, profitability ratios like gross profit and net profit ratios, and valuation ratios including EPS, P/E ratio, and dividend payout ratio. These ratios are calculated using information from a company's financial statements and are used to evaluate its operational efficiency, debt and liquidity levels, profitability, and stock valuation.

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    Liquidity Ratios :

    Current Ratio = Current Assets / Current Liabilities

    Acid-test Ratio = Quick Assets / Current Liabilities

    Turnover Ratios :

    Inventory Turnover = Cost of Goods Sold / Average Inventory


    Inventory Holding Period = 12 Months / Inventory Turnover Ratio

    Debtors Turnover = Net Credit Sales / Average Accounts Receivable


    Debtors Collection Period = 12 Months / Debtors Turnover Ratio

    Creditors Turnover Ratio = Net Credit Purchases / Average Creditors


    Creditors Payment Period = 12 Months / Creditors Turnover Ratio

    Cash Cycle = Inventory Holding Period + Debtors Collection Period Creditors Payment
    Period

    Fixed Assets Turnover = Net Sales / Average Net Fixed Assets

    Total Assets Turnover = Net Sales / Average Total Assets

    Leverage Ratios :

    Debt-Equity Ratio = Long Term Debt / Shareholders Equity

    Debt-Assets Ratio = Total Debt / Total Assets

    Proprietary Ratio = (Proprietors Funds / Total Assets) * 100

    Capital Gearing Ratio = (Preference Share Capital + Debentures + Long Term Loans) /
    (Equity Share Capital + Reserves & Surplus)

    Interest Coverage Ratio = EBIT / Interest

    Dividend Coverage Ratio = EAT / Preference Dividend

    Debt Service Coverage Ratio (DSCR) = (EAT + Interest + Non Cash Expenses) / (Principal
    Instalment + Interest)

    Profitability Ratios :

    Gross Profit Ratio = Gross Profit / Net Sales

    Operating Profit Ratio = EBIT / Net Sales

    Net Profit Ratio = EAT / Net Sales

    Cost of Goods Sold Ratio = Cost of Goods Sold / Net Sales

    Operating Ratio = (Cost of Goods Sold + Operating Expenses) / Net Sales

    Return on Assets = PAT / Average Total Assets

    Earning Power = PBIT / Average Total Assets

    Return on Capital Employed (ROCE) = [PAT + Interest * (1 Tax Rate)] / Average Total
    Capital Employed

    Return on Equity = PAT / Average Total Shareholders Equity

    Valuation Ratios :

    EPS = Net Profit available to Equity Shareholders / No. of Equity Shares outstanding

    Cash EPS = (Net Profit available to equity shareholders + Non Cash Expenses) / No. of
    Equity Shares outstanding

    Dividend Payout Ratio = DPS / EPS

    Retention Ratio = 1 (DPS / EPS)

    Price-Earnings Ratio = Market Price Per Share / Earnings Per Share

    Yield = (Dividend + Price Change) / Initial Price

    Market Value to Book Value Ratio = Market Price Per Share / Book Value per Share

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