Types of ratios? wht r they
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Answer Posted / madhu
Financial ratios can be broadly divided into three types.
They are:
1.Liquidity ratios: These ratios indicate the state of
liquidity of the company. Debtors of the company are
particularly interested in these ratios
Current ratio and quick ratio are the most important
liquidity ratios
2.Profitability ratios: These indicate whether the company
is profitable or not. Shareholders of the company are
particularly interested in these ratios
Gross profit margin, Net profit margin, Earnings power,
Return on equity,asset turn over ratio are some of the
profitablity ratios
3. Ownership ratios
Leverage ratios
Earnings ratios
Dividend ratios
| Is This Answer Correct ? | 21 Yes | 7 No |
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