This chapter covers the technique of accounting ratios for analysing the information contained in financial statements for assessing the solvency, efficiency
Accounting ratios are calculated from the financial statements to arrive at meaningful conclusions pertaining to liquidity, profitability, and solvency
Answer: Ratio has fallen Current assets only just cover the current liabilities May have problems in meeting debts when they fall due Is below the
3,25,000 Taking 360 days of the year, calculate the following ratios; also discuss the position of the company: (1) Gross profit ratio
Analysis of the financial statements can help to answer these questions There is a range of ratios of particular interest to the investor group;
Ratio Analysis A popular tool used to conduct a quantitative analysis of information pertaining to company's financial statements Generally, accounting
numbers derived from the financial statements, it is termed as accounting ratio It needs to be observed that accounting ratios exhibit relationship,
211 Accounting Ratios Solution Liquidity Ratio = Liquid Assets Current Liabilities Liquidity Assets = Current assets –(Inventories + Prepaid expenses +
MODULE - 6A Analysis of Financial Statements Notes 23 Accounting Ratios - I ACCOUNTANCY Solution Current Ratio = Current Assets Current liabilities
Operating (Net) Profit Ratio 6 Stock Turnover Ratio Solution – 1 (Problem related to Revenue Ratio) 1 Gross Profit Margin =
Investing inflow d) Financing inflow 9 What is a serious limitation of financial ratios? a)