Ratio analysis Flashcards
(27 cards)
Current Ratio
Current asset / Current liabilities
Quick ratio
Quick assets / current liabilities
Quick assets
Current assets - Advance tax - Prepaid expense - Inventories
Debt equity ratio
Long term debts [Non current liabilities] / Shareholder funds[Share capital + reserves and surplus]
Debt to total assets ratio
Long term debts / Total assets {Non current + current assets Or liabilities}
Proprietary ratio
Equity / Total assets
Gross profit ratio
Gross profit / revenue from operations x 100
Gross profit
Revenue from operations - cost of operations
Cost of revenue operations (COGS)
Opening inventory + purchases + direct expenses - closing inventory
OR
Revenue from operations - gross profit
Interest coverage ratio
PBIT / interest
Inventory turnover ratio
Cost of revenue from operations/ average inventory
Average inventory
Opening stock + closing stock by 2
Average age of inventory/BR/creditors
365 divided by inventory/BR/creditors turnover ratio
Trade receivable turnover ratio
Credit revenue from operations(credit sales) / average trade receivable
Trade payables turnover ratio
Net credit purchase/average trade payable
Working capital turnover ratio
Revenue from operations( sales)/ working capital
Operating ratio
Cost of revenue from operations + operating expenses - operating income
DIVIDED BY
Revenue from operations
Operating expenses
Employee benefit expenditure, selling expense, depreciation and amortization expense, bad debts, interest on short term loan
Operating income
Trading commission and cash discount received
Net profit ratio
Net profit after tax / revenue from operations
Operating profit ratio
Operating profit / revenue from operations x 100
Operating profit
Gross profit - operating expense + operating income
Earning per share
Net profit after tax, dividend on preference shares
DIVIDED by
Number of equity shares
