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21 Ratio Formula

# 21 Ratio Formula

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Ratio Analysis (financial Management)
Ratio Analysis (financial Management)

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08/08/2014

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# RATIO ANALYSIS

Types of ratio 1. 2. 3. 4. Liquidity ratio Capital structure ratio Turnover ratio Profitability ratio

Liquidity ratio
Ratio Formula Remark
 CA are those assets intended to be held for one year.  CL will expires with in a year  Bank OD not regarded as CL.

Current ratio

Current assets Current liabilities

Liquid ratio

Liquid assets Current liabilities

 LA=CA-(stk + prepaid expenses.  This ratio is also called as quick ratio or acid test ratio.

BY
V.GOKUL KRISHNA PAI

GOKUL KRISHNA PAI .RATIO ANALYSIS Cpital structure ratio  Debt means long term debt.  Where the Co. uses the FA on long term lease. interest.  The present value of the lease rentals should be considered as debt  Equity means share holder funds  Eqty=share capital +reserve & surplus – (miscellaneous expn+ P&L debt bal  Eqty is also called as net worth or proprietor fund Earning before depreciation. amortization Debt equity ratio Debt equity Int. tax. coverage ratio Debt service coverage ratio EBDITA Interest EBIT+ lease rental Interest+leaserental+(preference dividend+ loan repayment) /1-t BY V.

GOKUL KRISHNA PAI .RATIO ANALYSIS Turn over ratio Inventory turn over ratio CGS Avg stck (In times) (Or) Avg stck CGS Credit sales Avg debtor (in times) (Or) Avg debtor credit sales *360  CGS=opg stk + pur+csk Debtor turn over ratio  Debtor includes bill receivable *360  Creditor includes bills payabale Creditor turn over ratio Credit purchase Avg creditor (in times) Avg creditor Credit purchase *360 sales FA sales working capital sales capital employed FA assets turnover ratio Working capital turn over ratio Capital turn over ratio Capital employed can be found out by 2 ways  Debt +eqty  FA+working capital BY V.

profitability on sales G.GOKUL KRISHNA PAI .P ratio Operating pft ratio GP Sales Operating pft sales  GP= sales-CGS  OP=GP-admin & selling exp  It is also called as costing pft (or)  EBIT(or)  Net operating income PAT=Pft After Tax Net pft ratio PAT sales 2.Miscellaneous ratio EPS DPS Dividend pay out ratio Pft available to eqty SH no. of share DPS EPS (Or) Dividend amt pft MPS EPS PE ratio BY V. profitability on investments Return on capital employed Written on eqty PAT+INT Capital employed PAT equty Refer above 3. of share Dividends no.RATIO ANALYSIS Profitability ratio 1.

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