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 FOLLOWING ARE THE PROFITABILITY RATIOS WHICH

INDICATES PROFITABILITY OF THE COMPANY.

1) G.P RATIO = G.P/SALES *100

2) OPERATING PROFIT RATIO = OPERATING PROFIT OR E.B.I.T / SALES
*100

3) N.P RATIO = N.P OR P.A.T/SALES *100

4) RETURN ON CAPITAL EMPLOYED =

E.B.I.T OR OPERATING PROFIT / CAPITAL EMPLOYED * 100

5) RETURN ON SHARE HOLDERS FUND =

P.A.T / SHARE HOLDERS FUND * 100

6) RETURN ON EQ.SHARE HOLDERS FUND =

P.A.T – PREFERENCE SHARE DIVIDEND / EQ SHARE HOLDERS
FUND *100

7) RETURN ON TOTAL ASSETS =

P.A.T / TOTAL SALES *100

 FOLLOWING ARE THE LIQUID RATIO WHICH INDICATES THE
LIQUIDITY THAT IS CAPACITY TO PAY LIABILITIES OF THE CO.

8) CURRENT RATIO = CURRENT ASSETS / CURRENT
LIABILTIES

 THE IDEAL CURRENT RATIO IS 2 : 1

9) LIQIUD RATIO / QUICK RATIO / ACID TEST RATIO =

LIQUID ASSETS / LIQUID LIABILITIES

 THE IDEAL LIQUID RATIO IS 1 : 1

A. 10) INTREST COVERAGE RATIO = E. SH HOLDERS FUND  FOLLOWING ARE THE TURNOVER RATIO WHICH ARE KNOWN AS EFFECIANCY RATIOS. 17) FIXED ASSETS RATIO = SALES / FIXED ASSETS 18) TOTAL ASSETS TURNOVER RATIO = SALES / TOTAL ASSETS 19) CAPITAL TURNOVER RATIO = SALES / CAPITAL EMPLOYED .T / INTREST + PREF.I.A.I. / INTREST + INSTALMENTS  FOLLOWRING ARE THE CAPITAL STRUCTURE RATIO WHICH GIVES IDEA REGARDING THE RISK FACTOR 14) DEBT EQUITY RATIO = DEBT / EQUITY 15) PROPRITARY FUND RATIO = PROPRITARY FUND / TOTAL ASSETS *100 16) CAPITAL GEARING RATIO = DEBT + PREF.  FOLLOWING ARE THE COVERAGE RATIO WHICH INDICATES THE CAPACITY TO PAY RETURN ON THE INVESTMENT OF THE COMPANY.THEY ARE THE MOST IMPORATANT RATIOS FROM ALL OF THE RATIOS GIVEN AS IT TARGETS THE EFFICIANCY LEVEL OF THE COMPANY.SH CAP / EQ.T + INTREST + NON CASH EXP.B.T / PREFRENCE DIVIDEND 12) FIXED CHARGE COVERAGE RATIO = E.THESE RATIOS INDICATES EFFICIANCY OF THE COMPANY.B.T / INTREST 11) PREFRENCE DIVIDEND COVERAGE RATIO = P.DIVIDEND 13) DEBT SERVICE COVERAGE RATIO = P.

O.20) WORKING CAPITAL TURNOVER RATIO = SALES / WORKING CAPITAL 21) STOCK TURNOVER RATIO = C.S OR SALES / AVERAGE STOCK 22) RAW MATERIAL TURNOVER RATIO = MATERIAL CONSUMED / AVERAGE STOCK OF RAW MATERIAL 23) DEBTOR’S TURNOVER RATIO = CREDIT SALES / DEBTORS + BILLS RECEIVABLE 24) CREDITOR’S TURNOVER RATIO = CREDIT PURCHASE / CREDITORS + BILLS PAYABLE .G.