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Current ratio:
Current ratio is also known as short-term solvency ratio or
working capital ratio. Current ratio is use to assess the short-term financial
position of the business. In other words, it is an indicator of firms ability to
meet its short-term obligations.
Formula:
Current rstio = current assets/current liabilities
Quick ratio:
It is another measure of a companys liquidity. Quick ratio is
also known as liquid ratio or acid test ratio. It is the more stringent measure
of liquidity than current ratio.
Formula:
Quick ratio = liquid assets/current liabilities
Profitibality:
A ratio that is used to access buisness ability to generate earnings as compared to its
expenses and other relevant costsearned during a specific period of time.
Formula:
GPM=gross profit/net sales
Formula:
OPM=earning before interest and expenses/net sales
Formula:
NPM=net income/net sales
4-Return on equity:
It indicates that how much you are generating return on awners
investement.
Formula:
ROE=net income/average equity
5-Return on assets:
It indicates the relationship between net income and total assets.
Formula:
ROA=net income/total assets
6-Operating efficiency:
It indicates the efficiency of firm by comparing operating expense to net sales.
Formula:
OE=operating expense/net sales
Leaverage ratio:
It tells how much capital comes in the buisness in the form of debt.
Formula:
Debt ratio=total liabilities/total assets
2-Equity ratio:
It indicates the relative proportion used to finance companys assets.
Formula:
Equity ratio=total equity/total assets
Fotmula:
Debt to equity ratio=total liabilities/totalequity
Formula:
Interest coverage ratio=operating income/annual interest expense