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Ratios

Ratios

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Published by Pläýböý Mizan

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Published by: Pläýböý Mizan on Feb 17, 2012
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02/17/2012

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Profitability ratios: (i)Gross profit margin = (Gross profit / Sales x 100) % (ii)Net profit margin = (Net profit / Sales

x 100) % Liquidity ratios: (i)Current ratio = Current asset / Current liability (ii)Acid test ratio = (Current asset ± Inventory) / Current liability Efficiency ratios: (i)Debtors collection period = (Total debtors / Credit sales) x 365 Days (ii)Creditors collection period=(Total creditors/Credit purchase)x 365 Days Gearing ratios: (i)Debt to asset = Total liabilities / Total assets (ii)Asset to equity = Total asset / Total equity Investment ratios: (i)Return on equity = (Net income / Equity x 100) % (ii)Return on investment = {Net income / (Equity + Long term liabilty) x 100} %

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