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Ratio Analysis with its Ratios

Answer Posted / anish agarwal

RATION ANALYSIS HELPS IN COMPARISION OF BUSINESS OPERATIONS
TO A SIMILAR BSNS IN SAME INDUSRTY. ITS HELPS IN DECISION
MAKING AND ALSO TO SOLVE THOSE PROBS WHICH ARE TO BE FACED
IN FUTURE .

LIQUIDITY RATIOS
1. CURRENT RATIO : TOTAL CURRENT ASSETS / TOTAL CURRENT LIAB
2.QUICK RATION : CASH + RECEIVABLES+GOV SECURITY/ TOTAL CL
3.WORKING CAPTITAL RATIO : TCURRENT ASSETS-TCURRENT LIABS.
4.LEVERAGE RATIO-TOTAL LIAB/NET WORTH

INCOMENT STATEMENT RATIO ANALYSIS
GP RATIO GP/SALES
NP RATIO NP AFTER TAX/SALES

MANAGMENT RATIOS
INVENTORY TURNOVER RATIO = NET SALES/AVG INV AT COST.
ACC RECEIVABLES RATIO= ACC REC / DAILY CREDIT SALES
ASSET RETURN RATIO= NP BEFORE TAX / TOTAL ASSETS
RETURN ON INVESTMENT=NP BEFORE TAX / NET WORTH

Is This Answer Correct ?    5 Yes 1 No



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