Accounting Ratios the financial statements, it is termed as accounting ratio For example, if the gross profit of the business is Rs 10,000 and the
A ratio is a mathematical number calculated as a reference to relationship of two or more numbers and can be expressed as a fraction, proportion, percentage and
A popular tool used to conduct a quantitative analysis of information pertaining to company's financial statements Generally, accounting ratios are calculated
Accounting ratios are calculated from the financial statements to arrive at meaningful conclusions pertaining to liquidity, profitability, and solvency
However, like the above tools another important tool which is very useful to examine the financial statements is ratio analysis Accounting ratios are
Financial ratios are useful indicators of a firm's performance and financial The current assets used in the quick ratio are cash, accounts receivable,
1 2 Meaning of financial ratios As stated earlier, accounting ratios are an important tool of financial statements analysis A ratio is a mathematical
Accounting Ratio: It is an arithmetical relationship between two accounting variables All liquidity and solvency ratios are expressed in pure
business conditions and a host of others for effective application of accounting ratios for proper investment decisions in corporate organizations
classify accounting ratios into profitability, liquidity, efficiency and investment calculate profitability ratios (percentage of gross profit and net profit to sales, net
ratio analysis Accounting ratios are calculated from the financial statements to arrive at meaningful conclusions pertaining to liquidity, profitability, and solvency
PROFITABILITY RATIOS ACCOUNTING RATIOS: FORMULAS Ratio analysis is the technique of interpreting the final accounts of businesses in order to