Financial Ratios

Interpr-
S.No. Ratio Numerator Denominator etation
Efficiency Ratios
1 Debtors Turnover Ratio Net Credit Sales or Net sales Average Debtors Times
2 Inventory Turnover Ratio COGS or Net Sales Average Inventory Times
Current Assets Turnover
3 Ratio Net Sales Average Current Assets Times
Non Current Assets
4 Turnover Ratio Net Sales Average NCA Times
5 Total Assets Turnover Net Sales Average Total Assets Times
Liquidity Ratios
1 Current Ratio Current Assets Current Liabilities Times
Current Assets-Inventory-
2 Quick Ratio Prepaid Exp Current Liabilities Times
Cash and Bank+ Marketable
3 Super Quick Ratio Securities Current Liabilities Times
4 Debtors Collection Period 365 Debtors Turnover Days
5 Inventory Holding Period 365 Inventory Turnover Days
6 A/P Payable Period 365 A/P Turnover Days
Net Credit Purchases or
7 A/P Turnover Purchases Avg Accounts Payables Times
Cash Cycle or Net Debtors Collection Period + Inventory Holding Period-A/P
8 Operating Cycle Payment Period Days
Profitability Ratios
1 Gross margin Ratio Gross Profit Net Sales Percentage
2 Operating Profit Ratio Operating Profit Net Sales Percentage
3 Net Income Ratio PAT Net Sales Percentage
Average Equity
4 Return on Equity PAT - Pref. Dividend Shareholders Funds Percentage
5 Return on Total Assets PAT + Interest (1-Tax Rate) Average Total Assets Percentage
Average Non-Current
Return on Capital Liabilities and Equity
6 Employed PAT + Interest (1-Tax Rate) Shareholders Funds Percentage
7 Cash Realization Ratio Net CFOA PAT Times
8 EPS PAT Number of Equity shares Rupees
Long Term Solvency Ratios
Equity Shareholders’
1 Financial Leverage Ratio Total Assets Funds Times
Equity Shareholders’
2 Debt Equity Ratio Non Current Liabilities Funds Percentage
Non Current Liabilities +
Equity Shareholders’
3 Debt to Capital Employed Non Current Liabilities Funds Percentage
 4 Interest Coverage Ratio PBIT Interest Times
Valuation Ratios
1 Price Earnings Ratio Market Price per share Earnings Per Share Times
2 Price Sales Ratio Market Price per share Sales Per Share Times
3 Dividend Payout Ratio Dividends PAT Percentage
4 Dividend Yield Ratio Dividends Per share Market Price per share Percentage
5 MP to BV Ratio Market price per share Book Value Per share Times
Note: If average is not possible to calculate, closing value will be taken for computation of ratios.