Brilliant Types Of Ratio Analysis Formula
For this reason the activity ratio is also known as the efficiency ratio or the more popular turnover ratio.
Types of ratio analysis formula. Operating cycle Number of days of inventory Inventory InventoryAverage days cost of goods sold Cost of goods sold 365 Number of days of receivables Accounts receivable Accounts receivable Average days sales on credit Sales on credit 365. Liquidity the businesses ability to pay. Liquidity solvency efficiency profitability equity market prospects investment leverage and coverage.
Financial ratios are usually split into seven main categories. B Retained Earnings Ratio. We cover each type of ratio providing examples of ratios that fall into each of these classifications.
Current ratio which let us know the short term solvency of a firm. Learn Ratio Analysis in 15 Minutes Tricks and Formula Types Of Ratio Analysis Assignment Prime - YouTube. Financial ratio analysis compares relationships between financial statement accounts to identify the.
A shareholder ratio describes the companys financial condition in terms of amounts per share of stock. This ratio is of use to prospective investors to decide whether to invest in the equity shares of a company at a particular market price or not. Five different types of ratios can be used to measure.
Net profit after tax x 100 Net sales. The current ratio Current Ratio Formula The Current Ratio formula is Current Assets Current Liabilities. Earnings per share Net income - Preferred dividend weighted average number of sales outstanding x 100.
Let us discuss the types of activity ratios. Ratio Analysis Equations Formulas. Ratio Analysis is done to analyze the Companys financial and trend of the companys results over a period of years where there are mainly five broad categories of ratios like liquidity ratios solvency ratios profitability ratios efficiency ratio coverage ratio which indicates the companys performance and various examples of these ratios include current ratio.