Professional Documents
Culture Documents
Financial Statements
Ashutosh Kolte
PUMBA, University of Pune
Classification of Accounting
Accounting
Importance
• Globalization of the economy – Indian
XXX XXX
To Expenses / depreciation /
interest / administrative XXX
expenses, etc.. By Gross Profit b/d XXX
By income from
investment XXX
To Transfer to General
Reserve XXX
Equity Share
Capital
XXX Goodwill
XXX
Preference Share
Capital
XXX Fixed Assets
XXX
Reserves &
surplus
XXX Investments
XXX
Secured Loans
XXX Current Assets
XXX
Unsecured Loans
XXX Miscellaneous
Expenses (To
XXX
The Extent
Not Written Off)
Current Liabilities
& Provisions
XXX
Financial Ratio Analysis
Liquidity ratios
Profitability or Efficiency ratios.
Ownership ratios
* Earnings ratios
* Dividend ratios
* Leverage ratios
-- Capital structure ratios
-- Coverage ratios
Turnover Ratios
Liquidity ratios
Current ratio
Current Assets
Current Liabilities
Quick Assets
Current Liabilities
* Quick assets =
Current Assets – Inventories.
Cash Ratio / Super Quick Ratio
= Cash + Marketable Securities
Current liabilities
Profitability or Efficiency ratios
Profitability ratios measure a firm’s overall
efficiency and effectiveness in generating profit.
Gross Profit
Net Sales
* Net Sales = Sales – Excise Duty
Net Profit
Net Sales
Cost of Goods Sold Ratio =
Cost of Goods Sold / Net Sales
.. EBIT ..
Interest expense
Debt service coverage ratio
= 360
Av. accounts receivable turnover
= Av.accounts receivable
Av. daily sales
Asset turnover ratio =
Cost of Goods Sold
Av. Assets