Scribd
Upload
222 views2 pages

Liquidity Ratios: Basic Formulas of Ratio Analysis

This document outlines various ratios used in financial analysis. It provides 12 liquidity ratios, 12 profitability ratios, 7 working capital ratios, 4 capital structure ratios, and 1 overall profitability ratio. The ratios measure aspects of a company like liquidity, profitability, working capital management, capital structure, and overall efficiency. Formulas are given for each ratio to calculate it based on figures from a company's financial statements.

Uploaded by

Vishal Ingole
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
222 views2 pages

Liquidity Ratios: Basic Formulas of Ratio Analysis

This document outlines various ratios used in financial analysis. It provides 12 liquidity ratios, 12 profitability ratios, 7 working capital ratios, 4 capital structure ratios, and 1 overall profitability ratio. The ratios measure aspects of a company like liquidity, profitability, working capital management, capital structure, and overall efficiency. Formulas are given for each ratio to calculate it based on figures from a company's financial statements.

Uploaded by

Vishal Ingole
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Basic Formulas of Ratio Analysis

Liquidity Ratios
S. No. RATIOS FORMULAS
1 Current Ratio Current Assets/Current Liabilities
2 Quick Ratio Liquid Assets/Current Liabilities
3 Absolute Liquid Ratio Absolute Liquid Assets/Current Liabilities

Profitability Ratios
S.
RATIOS FORMULAS
No.
1 Gross Profit Ratio Gross Profit/Net Sales X 100
2 Operating Cost Ratio Operating Cost/Net Sales X 100
3 Operating Profit ratio Operating Profit/Net Sales X 100
4 Net Profit Ratio Operating Profit/Net Sales X 100
Net Profit After Interest  And Taxes/ Shareholders Funds or
5 Return on Investment Ratio
Investments  X 100
Return on Capital
6 Net Profit after Taxes/ Gross Capital Employed X 100
Employed Ratio
Net Profit After Tax & Preference Dividend /No of Equity
7 Earnings Per Share Ratio
Shares
8 Dividend Pay Out Ratio Dividend Per Equity Share/Earning Per Equity Share X 100
Net Profit after Tax & Preference Dividend / No. of Equity
9 Earning Per Equity Share
Share
10 Dividend Yield Ratio Dividend Per Share/ Market Value Per Share X 100
Market Price Per Share Equity Share/ Earning Per Share X
11 Price Earnings Ratio
100
Net Profit to Net Worth
12 Net Profit after Taxes / Shareholders Net Worth X 100
Ratio
Working Capital Ratios
S. No. RATIOS FORMULAS
1 Inventory Ratio Net Sales / Inventory
2 Debtors Turnover Ratio Total Sales /  Account Receivables
Receivables  x Months or days in a year / Net Credit Sales
3 Debt Collection Ratio
for the year
4 Creditors Turnover Ratio Net Credit Purchases / Average Accounts Payable
5 Average Payment Period Average Trade Creditors / Net Credit Purchases X 100
Working Capital Turnover
6 Net Sales / Working Capital
Ratio
7 Fixed Assets Turnover Ratio Cost of goods Sold / Total Fixed Assets
8 Capital Turnover Ratio Cost of Sales / Capital Employed

Capital Structure Ratios


S. No. RATIOS FORMULAS
1 Debt Equity Ratio Total Long Term Debts / Shareholders Fund
2 Proprietary Ratio Shareholders Fund/ Total Assets
3 Capital Gearing ratio Equity Share Capital / Fixed Interest Bearing Funds
4 Debt Service Ratio Net profit Before Interest & Taxes / Fixed Interest Charges

Overall Profitability Ratio


S. No. RATIOS FORMULAS
1 Overall Profit Ability Ratio Net Profit / Total Assets

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy