Ratio Analyis, What is PE ratio, how do you calculate it,
EPS, Bills recievable and other ratios

Answer Posted / subbarayudu batchu

Ratio: Determining the relationship between two financial terms

Ratio Analysis: Analyzing the relationship and impact on entity's activities.

PE ratio: Market Price of the Share(MPS) / Earnings Per Share (EPS)

MPS: Market Capitalization / Total No. Of Equity Shares
EPS: Earnings available for Equity Shareholders
(Assumed there is no Preference Share Capital)

Bills Receivable: Net Credit Sales (i.e., after deducting returns, if any)
For calculating ratios B/R will be considered as Average Figures.
Why?
Ans:Sales will be made evenly through out the year (Assumed)

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