Ratio Analysis:

It is concerned with the calculation of relationships, which after proper identification& interpretation may provide informati
about the operations and state of affairs of a businessenterprise. The analysis is used to provide indicators of past performa
terms of criticalsuccess factors of a business. This assistance in decision-making reduces reliance on guessworkand intuition
establishes a basis for sound judgments.

Liqudity Measurement Profitability Indicator

Current Ratio Profit Margin Analysis
Quick ratio Return on Asset
Return on Equity
Return on Capital Employed

S. No. RATIOS

1 Current Ratio

2 Quick Ratio
3 Absolute Liquid Ratio

4 Gross Profit Ratio

5 Operating Cost Ratio
6 Operating Profit ratio
7 Net Profit Ratio
8 Return on Investment Ratio

9 Return on Capital Employed

Ratio
10 Earnings Per Share Ratio

11 Dividend Pay Out Ratio

12 Earning Per Equity Share

13 Dividend Yield Ratio

14 Price Earnings Ratio

15 Net Profit to Net Worth Ratio

16 Inventory Ratio
17 Debtors Turnover Ratio

18 Debt Collection Ratio

19 Creditors Turnover Ratio

20 Average Payment Period

21 Working Capital Turnover Ratio

22 Fixed Assets Turnover Ratio

23 Capital Turnover Ratio

24 Debt Equity Ratio

25 Proprietary Ratio
26 Capital Gearing ratio

27 Debt Service Ratio

28 Overall Profit Ability Ratio

h after proper identification& interpretation may provide information
erprise. The analysis is used to provide indicators of past performance in
ce in decision-making reduces reliance on guessworkand intuition and

Financial Leverage/Gearing Performance Indicator

Equity Ratio Fixed Asset Turnover Ratio
Debt Ratio Sales/ Revenue
Debt-Equity Ratio Average Collection period
Capitalization Ratio Inventory Turnover
Coverage Ratios Total Asset Turnover Ratio
FORMULAS

Current Assets/Current Liabilities

Liquid Assets/Current Liabilities

Absolute Liquid Assets/Current Liabilities

Gross Profit/Net Sales X 100

Operating Cost/Net Sales X 100
Operating Profit/Net Sales X 100
Operating Profit/Net Sales X 100
Net Profit After Interest And Taxes/
Shareholders Funds or Investments X 100

Net Profit after Taxes/ Gross Capital

Employed X 100
Net Profit After Tax & Preference
Dividend /No of Equity Shares

(Dividend Per Equity Share/Earning Per

Equity Share) X 100
(Net Profit after Tax & Preference
Dividend) / No. of Equity Share
(Dividend Per Share/ Market Value Per
Share) X 100
(Market Price Per Share Equity Share/
Earning Per Share) X 100
(Net Profit after Taxes / Shareholders Net
Worth) X 100
Net Sales / Inventory
Total Sales / Account Receivables

Receivables x Months or days in a year /

Net Credit Sales for the year

Net Credit Purchases / Average Accounts

Payable
Average Trade Creditors / Net Credit
Purchases X 100
Net Sales / Working Capital

Cost of goods Sold / Total Fixed Assets

Cost of Sales / Capital Employed

Total Long Term Debts / Shareholders
Fund
Shareholders Fund/ Total Assets
Equity Share Capital / Fixed Interest
Bearing Funds
Net profit Before Interest & Taxes / Fixed
Interest Charges
Net profi/Total Assets
Investment Evaluation
Price Earning Ratio
Price Earning Ratio to Growth Ratio
Dividend Yeild and Payout Ratio