Profitability ratios look at the returns earned by a business both in terms of its trading activities (sales revenue) and also how much is invested in earning those returns (capital employed). This revision video introduces the four main profitability ratios.

Views: 86055
tutor2u

http://www.subjectmoney.com
http://www.subjectmoney.com/articledisplay.php?title=Financial%20Statement%20Analysis%20and%20Ratios
In this financial statement analysis tutorial we are covering liquidity measures or short term solvency ratios. Here you will learn about the current ratio, the quick ratio (acid test) and the cash ratio. Short-term solvency measures are used to determine whether or not a company would be able to pay off its short-term liabilities if they were to come due within the near future.
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https://www.youtube.com/watch?v=G8v9hF0k3gI

Views: 75455
Subjectmoney

Learn more about liquidity ratios here on the tutor2u website:
https://www.tutor2u.net/business/reference?q=liquidity+ratio
In this short revision video, Jim Riley from tutor2u Business introduces the concept of liquidity ratios and explains how to calculate and interpret the two main ratios: the current ratio and acid-test ratio.

Views: 129664
tutor2u

I have discussed about liquidity, profitability, solvency and and activity ratios in this video

Views: 36489
Amjad Niaz

Ratios Analysis - Interpretation Video Lecture in English by Sir ARD
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profitability ratios
liquidity ratios
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ratios analysis
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interpretation of accounts
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Views: 478
Ahmed Raza Dharolia

Current ratio, ratio analysis. liquidity ratio, profitability ratio, market ratio, liquidity ratio, solvency ratio, market prospects ratio, working capital, trend analysis, common-size financial statements, acid test ratio, account receivable turnover, inventory turnover, asset turnover, gross profit, debt ratio, equity ratio, times interest earned, dividend yield. pe ratio, financial statement analysis, vertical analysis, horizontal analysis,

Views: 3032
Farhat's Accounting Lectures

Liquidity ratios & solvency ratios meaning explained in hindi. What is liquidity, solvency, insolvency? Liquidity risk and solvency risk should be analyzed for any company or individual.
For a company, we analyse liquidity ratios - current ratio, quick ratio, cash ratio and solvency ratios - debt ratio, debt to equity ratio, interest coverage ratio, debt service coverage ratio (dscr) etc.
Related Videos:
Current Ratio: https://youtu.be/STR_aUzAxpI
Quick Ratio: https://youtu.be/QdPzteTZ1Dk
Cash Ratio : https://youtu.be/-G5Pco2xnBk
Current Assets & Current Liabilities: https://youtu.be/6_ZPGktZIts
Assets, Liabilities & Equity: https://youtu.be/4BhpDCAL62M
लिक्विडिटी रेश्यो और सॉल्वेंसी रेश्यो का मतलब इस वीडियो में हिंदी में समझाया गया है। लिक्विडिटी, सॉल्वेंसी, इन्सॉल्वेंसी क्या है? किसी भी कंपनी या व्यक्ति के लिए लिक्विडिटी रिस्क और साल्वेंसी रिस्क का एनालिसिस किया जाना चाहिए।
कंपनी के लिए, हम लिक्विडिटी रेश्यो का विश्लेषण करते हैं - करंट रेश्यो, क्विक रेश्यो, कैश रेश्यो, और सॉल्वेंसी रेश्यो - डेब्ट रेश्यो, डेब्ट टू इक्विटी रेश्यो, इंटरेस्ट कवरेज रेश्यो, डेब्ट सर्विस कवरेज रेश्यो (dscr) आदि।
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In this video, we have explained:
What are the liquidity ratios and solvency ratios?
What is the meaning of liquidity risk and solvency risk?
How to analyze the liquidity risk and solvency risk for any company or individual?
What is the meaning of insolvent company?
What is the differences between liquidity, solvency, and insolvency?
How to know if a company or individual is bankrupt?
What is the formula for liquidity ratio calculation and solvency ratio calculation?
Analyzing liquidity ratios and solvency ratios of a company can help us to understand the risks of bankruptcy. Liquidity ratios such as current ratio, quick ratio, cash ratio help us to understand the liquidity risk status and solvency ratios such as debt ratio, debt service coverage ratio (dscr), interest coverage ratio can be helpful to analyze the solvency risks.
Make sure to Like and Share this video.
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Hope you liked this video in Hindi on “Liquidity Ratios & Solvency Ratios”.

Views: 26750
Asset Yogi

#financialratios #financialratioanalysis #liquidityratios

Views: 3322
easyCBSE commerce lectures

#RatioAnalysis #LiquidityRatios #ActivityRatios
Described the concept, reason and logic behind formation of different formulas of analysis of financial statements. I have discussed the core concept of contents used in the following formulas: Current Ratio, Quick Ratio, Fixed Assets Turnover Ratio, Current Assets Turnover Ratio and Working Capital Turnover Ratio,
Further discussed concept of Current Assets, Quick Assets so that student need not to remember formula to solve any question
Connect on Facebook :
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Download Assignments:
https://drive.google.com/drive/folders/0BzfDYffb228JNW9WdVJyQlQ2eHc?usp=sharing

Views: 184110
CA. Naresh Aggarwal

This BeeBusinessBee video focuses on the topic of liquidity ratios. It looks that the concept of conducting ratio analysis from a set of financial accounts, specifically what would be required if you were being asked to assess the liquidity of an organisation?
This video forms part of a series of videos on this topic and has been designed with questions that will test your knowledge and understanding. It is important to remember to pause the video when you reach a series of questions.
Remember that additional resources and materials can be found online at; www.beebusinessbee.co.uk

Views: 5115
Bee Business Bee

OMG wow! So easy clicked here http://mbabullshit.com/ for Financial Ratio Analysis Explained
Financial Ratio Analysis Explained in 3 minutes
Sometimes it's not enough to simply say a company is in "good or bad" health...
To make it easier to compare a company's health with other companies, we have to put numbers on this health, so that we can compare these numbers with the numbers of other companies... So now... how do we use numbers to assess company health? http://www.youtube.com/watch?v=TZZFBkbC2lA This is where Financial Ratios come in...
Very common types of financial ratios are Liquidity Ratios, Profitability Ratios, and Leverage Ratios. Liquidity Ratios can tell us how easily a company can pay its debts... so that the company doesn't get eaten up by banks or other creditors. An example of this is the Current Ratio... This tells us how much of your company's stuff can be easily changed into cash within the next 12 months so that it can pay debts which need to be paid also within 12 months. The higher your current ratio is, the less risky a situation your company is in.
Now moving on... Profitability Ratios can tell us how good a company is at making money. An example of this is the Profit Margin Ratio. This tells us how much profit your company earns compared to your company's sales. Normally, a higher number is better; because you want to earn more profit for every $1 of sales that you get.
And finally, what about Leverage Ratios? These can tell us how much debt the company is using to make the company run and stay alive. An example of this is the simple Debt Ratio. This tells us how much % of a company's assets are paid for by debt. Normally, a company is considered "safer" when the debt ratio is low. Note that this was just a very simple overview. There are a lot more financial ratios & many different ways of using them; plus a lot of problems and disadvantages in using them as well. Would you like to SUPER easily learn more about many financial ratios with even deeper analysis & detail? Check out my FREE videos at MBAbullshit.com
See ya there!

Views: 1287295
MBAbullshitDotCom

A brief introduction into three basic profitability ratios:
1. Gross Profit Ratio
2. Net Profit Ratio
3. Rate of Return on Equity Ratio
More videos, tasks, quizzes, handouts and other resources can be found at https://meyerflippedlearning.com/#!/home

Views: 15091
Bernd Meyer

This screncast demonstrates the calculation of eight basic ratios for assessing an entity's financial performance.

Views: 2374
Luke Fannon

This video walks through the calculation and interpretation of the current, quick, inventory turnover, days sales outstanding, fixed asset turnover, total asset turnover, total debt to total asset, times interest earned and cash coverage ratios.

Views: 130085
Kevin Bracker

Want to compare or find a trend you need to understand Financial Ratios. Financial ratio analysis is a useful tool for users of financial statement.
The video beautifully explains what is the meaning of the ratio, various advantages of using a ratio and highlighting different types of ratios -
L - Liquidity ratio
S- Solvency ratio
P - Profitability ratio
A- Activity ratio
(Please do share your feedback).

Views: 122418
financeschoolin

This video explains how to calculate and interpret the Current Ratio, a common method of evaluating a firm's short-term liquidity. The video provides of an example of how to compute the Current Ratio for two firms and interpret the results.
Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com
To like us on Facebook, visit https://www.facebook.com/Edspira
Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com
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Views: 49126
Edspira

An introduction to Financial Ratio Analysis in hindi. Financial ratios like profitability ratios, liquidity ratios, solvency ratios (leverage or debt ratios), activity ratios (efficiency ratios) and valuation or market ratios are analyzed before making an investment decision or to judge the financial health of a company.
Few examples are discussed for each type of ratio for eg. profit margin, current ratio, debt ratio, inventory turnover ratio, earnings per share (EPS) and P/E ratio.
Related Videos:
Profitability Ratios - Gross, Net, Operating Profit Margin
: https://youtu.be/pHgiuO2ZYoU
Liquidity Ratios & Solvency Ratios: https://youtu.be/ZMSW9BYb_Yo
Return on Investment (ROI): https://youtu.be/ij7y5e2MVG4
Earnings Per Share (EPS): https://youtu.be/SDXp64flfJI
इस वीडियो में जानिए फाइनेंसियल रेश्यो एनालिसिस का हिंदी में परिचय। फाइनेंसियल रेश्यो जैसे की प्रोफिटेबिलिटी रेश्यो, लिक्विडिटी रेश्यो, सॉल्वेंसी रेश्यो (लिवरेज या डेब्ट रेश्यो), एक्टिविटी रेश्यो (एफिशिएंसी रेश्यो) और वैल्यूएशन या मार्केट रेश्यो को एनालाइज़ किया जाता है कोई भी निवेश का निर्णय लेने से पहले और किसी कंपनी के फाइनैंशल हेल्थ को जज करने के लिए भी किया जाता है।
हर एक प्रकार के रेश्यो के लिए कुछ उदाहरणों पर चर्चा की गयी है जैसे: प्रॉफिट मार्जिन, करंट रेश्यो, डेब्ट रेश्यो, इन्वेंटरी टर्नओवर रेश्यो, अर्निंग्स पर शेयर (EPS) और P/E रेश्यो।
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In this video, we have explained:
What are the financial ratios?
How financial ratio helps you to understand the financial health of a company?
What is the concept of financial ratios?
How to analyze a company's financial health using financial ratios?
How many types of financial ratios are used for the financial status of a company?
What is the meaning of different financial ratios?
How to calculate different financial ratio?
How to do financial ratio analysis?
What is the concept of financial ratio analysis?
Which financial ratios can be used to analyze the financial status of a company?
What is the basic concept of profitability ratios, liquidity ratios, solvency ratios, activity ratios and market ratios?
Make sure to Like and Share this video.
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Hope you liked this video in Hindi on “Financial Ratios & Analysis”.

Views: 44999
Asset Yogi

In this free video lecture from the Wiley CMAexcel CMA Review Course, Dallon Christensen, CMA, CPA/CIPTA, discusses how investors use ratios to make decisions about the health of a business.
This video goes into detail about how liquidity and solvency ratios are easier to chart and graph over time, revealing trends to inform decisions. A separate lesson is dedicated to profitability ratios.
For more, register for a free 14-day trial of Wiley CMAexcel http://ow.ly/KrMp3

Views: 11913
Wiley

Ratio Analysis: This video include LIQUIDITY RATIO/LIQUID RATIO with solved numerical examples which will help you to solve your problems.
Link for 1st part : https://www.youtube.com/edit?o=U&video_id=mqHx3RMLfRY
This video provide you the solution of 4 practical examples starting from easy to difficult questions. Liquid ratio is also called as quick ratio or acid test ratio.
I hope this video will help you to solve your practical questions.
Thanks.
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JOLLY Coaching

Whilst widely-used and understood, there are several limitations with using ratio analysis. This revision video explores these limitations.

Views: 22531
tutor2u

In this video we have discussed ratio analysis of financial statements in hindi.We have discussed the categorization of
different ratios and their types such as liquidity ratio : Current ratio and quick ratio, leverage ratio, debt equity ratio, debt service
coverage ratio, return on capital employed roce, return on assets, return on equity etc.
If Found our video helpful to you anyway, Then don't forget to like the video.
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Views: 70727
BANKING SUTRA

Profitability Ratio Analysis: Financial Ratio Analysis Explained
Support AccoFina's Patreon if you are a Fan or Believer in my work, https://patreon.com/accofina
Time Markers:
1) The Profit Margin 1:17
2) The Gross Profit Margin 5:47
3) The Return on Assets 14:28
4) The Return on Equity 21:47
5) Different ways to conduct ratio analysis 27:56
6) Key ideas with all ratio analysis 29:06
1) THE PROFIT MARGIN
Tells us how much profit is generated from sales.
Percentage of sales revenue that ends up as profit Good indicator of cost control and/or pricing power.
Profit Margin Formula:
Profit Margin = Net Income / Sales Revenue Example
Where do we find the Required Inputs?
Net Income: From the Income Statement
Sales Revenue: From the Income Statement
How to Interpret Changes in the Ratio:
Expenses have changed in relation to sales...
* Management is effective with cost control
* Economies of scale are being utilised.
Sales Revenue has changed in relation to expenses...
* Change in pricing power (bargaining position with consumers)
* Change in state of the economy and aggregate demand
2) THE GROSS PROFIT MARGIN (Very important for resellers and manufacturers)
Profit between cost of inventory and sales price.
How much sales revenue left to cover profit and all other expenses.
Gross Profit Margin Formula:
Gross Profit Margin = (Sales Revenue - Cost of Goods Sold) / Sales Revenue
Where do we find the Required Inputs?
Sales Revenue: From the Income Statement
Cost of Goods Sold: From the Income Statement
How to Interpret Changes in the Ratio:
Sales Revenue has changed in relation to cost of goods sold...
* Change in pricing power (bargaining position with consumers)
* Change in product or aggregate demand (without a flow through the supply chain yet)
* Market competitive position and pressures
Cost of Goods Sold has changed in relation to sales revenue...
* Power within the supply chain
* Change in supplier or production efficiency Changes in prices of particular commodity inputs
3) RETURN ON ASSETS
Return generated by the assets for those who funded the assets.
Insight into success of management in income generating asset allocation and utilisation.
Return on Assets Formula:
Return on Assets = (Income beforeTax + Interest Expense) / ((Assets at Start of Period + Assets at End of Period) / 2)
Where do we find the Required Inputs?
Income before Tax: From the Income Statement
Interest Expense: From the Income Statement
Assets at Start of Period: From the Previous Balance Sheet
Assets at End of Period: From the Current Balance Sheet
How to Interpret Changes in the Ratio:
Profitability has changed in relation to the level of assets...
* Management is getting ‘more from less’ in regards to assets
* Management has made good asset allocation decisions in terms of revenue
* Management has good control of costs in relation to expenses Previously mentioned reasons: e.g. economy, market power, competitive position
Level of assets have changed in relation to profitability...
* Assets may have suddenly increased through large, recent
* CapEx Assets may not be being replaced or replenished at the same rate
* Particular choice of depreciation/amortisation policies
4) RETURN ON EQUITY
Return generated for the owners of the business, the common stockholders.
Insight into success of any leverage used (when comparing to return on assets).
Return on Equity Formula:
Return on Equity = (Net Income - Preference Dividends) / ((Common Stockholder Equity at Start of Period + Common Stockholder Equity at End of Period) / 2)
Where do we find the Required Inputs?
Net Income: From the Income Statement
Preference Dividends: From the Income Statement or Investor Relations
Equity at Start of Period: From the Previous Balance Sheet
Equity at End of Period: From the Current Balance Sheet
How to Interpret Changes in the Ratio:
Profitability has changed in relation to the level of common stockholder equity...
* Management performance is changing in the eyes of, and on behalf of, the owners/employers
* Previously mentioned reasons: e.g. economy, market power, competitive position, cost control, asset utilisation
Common Stockholder Equity has changed in relation to profitability...
* The level of liabilities have changed (and thus equity)
* A stock issue or stock buyback (i.e. equity levels have changed)
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Views: 53584
AccoFina

CMA بالعربي - Part2 - Sec. A Financial Analysis (2)
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CMAEducation

Liquidity & Solvency Ratios
In this video we are going to discuss about liquidity & solvency ratios. Liquidity ratios measure the company’s ability to meet short term obligations (arising over the next 1 yr.) and solvency ratios measure the company’s ability to meet the long term debt obligations (Greater than 1yr)
The important liquidity ratios discussed in this video are
Current ratio
Quick ratios
Cash conversion cycle
Current ratio = Is calculated as Current assets/Current liabilities
The current ratio for star Moto corp. for yr. ending 31-03-2017 was
= 75000/40000
= 1.87
It means that star Moto corp. has more than enough current assets to meet its short term obligations/current liabilities.
Current ratio of 1 indicates that the amount of current assets = current liabilities
Companies that have a current ratio greater 1 are in a comfortable position and companies which have a current ratio of less than 1 do not have enough current assets to meet their current liabilities, they need to generate or raise money to meet their short term obligations.
Quick Ratio or Acid test ratio = Is calculated as Cash + Current investments + Receivables/current liabilities
The Quick ratio for Star Moto corp. for 31-03-2017 was
= 68000/40000
= 1.7
This is a more stringent measure of liquidity when compared to the current ratio. Inventories may not be easily convertible to cash and companies may not be able to sell its inventory quickly.
Hence inventories are not taken into a/c while calculating this ratio
Cash conversion cycle is calculated as
CCC = Inventory days + receivable days - payable days
The CCC is not a ratio, because it is expressed in no. of days. It signifies the no. of days it takes a company to convert inventories into working capital and subsequently collect cash
The CCC of Star Motocorp for 31-03-2017 is.
= 9 + 14 – 54
= -31 days.
Star Motocorp had a negative cash conversion cycle. This means that the company is selling its inventory & collecting cash from customers faster than it is paying its suppliers for Raw materials.
The important solvency ratios discussed in this video are
Debt / equity
Interest coverage
The debt equity ratio measures the amount of debt a company has relative to its equity.
Debt ratio of 1 signifies the company has an equal amount of debt & equity. A higher ratio signifies that a company has higher levels of debt and investors need to have a close watch on these companies.
The debt /equity ratio of Star Motocorp for yr ending 31-03-2017
Debt/Equity = 5000/100000 = 0.05
The company has negligible debt and in is a very comfortable position
Interest coverage ratio = Is calculated as EBIT/Interest payments
This ratio measures the no of times the company can make its interest payments with its current operating earnings.
A higher interest coverage ratio signifies that the company can comfortably service its interest payments from EBIT/ Operating earnings.
The interest coverage ratio for Star Motocorp for 31-03-2017 was.
45000/5000= 9
The company is in a very comfortable position on this front
To conclude, liquidity & solvency ratios of the company need to be studied over a period of time and compared with other players in the industry to check if its performance is improving or deteriorating in meeting its long term and short term obligations.

Views: 204
Fintapp

Views: 2520
Económicas 15

nother way of avoiding the problems involved in comparing companies of different sizes is to calculate and compare financial ratios. Such ratios are ways of comparing and investigating the relationships between different pieces of financial information. Using ratios eliminates the size problem because the size effectively divides out. We’re then left with percentages, multiples, or time periods.
There is a problem in discussing financial ratios. Because a ratio is simply one number divided by another, and because there are so many accounting numbers out there, we could examine a huge number of possible ratios. Everybody has a favorite. We will restrict ourselves to a representative sampling.
In this section, we only want to introduce you to some commonly used financial ratios. These are not necessarily the ones we think are the best. In fact, some of them may strike you as illogical or not as useful as some alternatives. If they do, don’t be concerned. As a financial analyst, you can always decide how to compute your own ratios.
One of the best known and most widely used ratios is the current ratio. As you might guess, the current ratio is defined as follows:
Current assets divided by current liabilities.
Inventory is often the least liquid current asset. It’s also the one for which the book values are least reliable as measures of market value because the quality of the inventory isn’t considered. Some of the inventory may later turn out to be damaged, obsolete, or lost.
More to the point, relatively large inventories are often a sign of short-term trouble. The firm may have overestimated sales and overbought or overproduced as a result. In this case, the firm may have a substantial portion of its liquidity tied up in slow-moving inventory.
To further evaluate liquidity, the quick, or acid-test, ratio is computed just like the current ratio, except inventory is omitted.
LONG-TERM SOLVENCY MEASURES
Long-term solvency ratios are intended to address the firm’s long-term ability to meet its obligations, or, more generally, its financial leverage. These are sometimes called financial leverage ratios or just leverage ratios.
The total debt ratio takes into account all debts of all maturities to all creditors.

Views: 7828
Farhat's Accounting Lectures

this video is all about Ratio analysis and different types of ratios liquidity ratio,turnover ratio,solvency ratio and profitability ratio
In this video you will get to know that how much the share market can gives returns
the four companies that can make you a millionaire if you invested in that before 15 to 20 yrs ago
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Views: 71
Ashish Varwani

In this video I show you a spreadsheet with Financial Statements and we calculate and discuss financial ratios. This is from my course on Udemy called Startups: A Guide to Entrepreneurship. In the course you can download the spreadsheet in order to get better insight into the calculations and how financial statements interconnect and flow.
Horizontal and Vertical Analysis
Horizontal analysis compares financial information over time, typically from past financial statements such as the income statement. When comparing this past information we look for variations of particular line items such as higher or lower earnings, sales revenues, or particular expenses. Horizontal analysis is used to look for trends that can be extrapolated in order to predict future performance.
Vertical analysis is a proportional analysis performed on financial statements. It is ratio analysis. Line items of interest on the financial statement are listed as a percentage of another line item. For example, on an income statement each line item will be listed as a percentage of Sales.
Financial Ratios
Financial ratios are powerful tools used to assess company upside, downside, and risk. There are four main categories of ratios: liquidity ratios, profitability ratios, activity ratios and leverage ratios. These are typically analyzed over time and across competitors in an industry. Using ratios “normalizes” the numbers so you can compare companies in apples-to-apples terms.
Liquidity and Solvency
Solvency and liquidity are both refer to a company’s financial health and viability. Solvency refers to an enterprise's capacity to meet its long-term financial commitments. Liquidity refers to an enterprise’s ability to pay short-term obligations. Liquidity is also a measure of how quickly assets can be sold to raise cash.
A solvent company is one that owns more than it owes. It has a positive net worth and is carrying a manageable debt load. A company with adequate liquidity may have enough cash available to pay its bills, but may still be heading for financial disaster down the road. In this case a company meets liquidity standards but is not solvent. Healthy companies are both solvent and possess adequate liquidity.
Liquidity ratios are used to determine whether a company has enough current asset capacity to pay its bills and meet its obligations in the foreseeable future (current liabilities). Solvency ratios are a measure of how quickly a company can turn its assets into cash if it experiences financial difficulties or is threatened with bankruptcy. Both measure different aspects of if, and how long, a company can pay its bills and remain in business.
The current ratio and the quick ratio are two common liquidity ratios. The current ratio is current assets/current liabilities and measures how much liquidity (cash) is available to address current liabilities (bills and other obligations). The quick ratio is (current assets – inventories) / current liabilities. The quick ratio measures a company’s ability to meet its short-term obligations based on its most liquid assets, and therefore excludes inventories from its current assets. It is also known as the “acid-test ratio.”
The solvency ratio is used to examine the ability of a business to meet its long-term obligations. Lenders and bankers most commonly use the solvency ratio because they are most concerned about their ability to get paid back any money they lend. The ratio compares cash flows to liabilities. The solvency ratio calculation involves the following steps:
All non-cash expenses are added back to after-tax net income. This approximates the amount of cash flow generated by the business. You can find the numbers to add back in the Operations section of the Cash Flow Statement.
Add together all short-term and long-term obligations. This is the Total Liabilities number on the Balance Sheet. Then divide the estimated cash flow figure by the liabilities total.
The formula for the ratio is:
(Net after-tax income + Non-cash expenses)/(Short-term liabilities + Long-term liabilities)
A higher percentage indicates an increased ability to support the liabilities of a business over the long-term. Acceptable solvency ratios vary from industry to industry, but as a general rule of thumb, a solvency ratio of greater than 20% is considered financially healthy.
Remember that estimations made over a long term are inherently inaccurate. There are many variables that can impact the ability to pay over the long term. Using any ratio to estimate solvency needs to be taken with a grain of salt.

Views: 667
MBA ASAP

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Welcome to this course " Financial Management in Tamil (தமிழ் மொழியில் நிதி மேலாண்மை)"
தமிழ் மொழியில் நிதி மேலாண்மை - இந்த ஆன்லைன் பாடநெறிகளுக்கு உங்களை வரவேற்கிறோம்.
இந்த பாடத்திட்டத்தில் உங்கள் சொந்த தாய்மொழியில் நிதி மேலாண்மை பற்றி நீங்கள் அறிந்து கொள்வீர்கள்.
இந்த பாடத்தில் விவாதிக்க வேண்டிய தலைப்புகள்:
a) Basics of Financial Management
b) Time Value of Money
c) Financial Ratio Analysis
d) Cash Flow Analysis
e) Fund Flow Analysis
f) Capital Structuring Decisions
g) Cost of Capital
h) Capital Budgeting
i) Working Capital Management
இந்த பயிற்சி சுய வேகக் கற்றல் பாணியில் கட்டமைக்கப்பட்டுள்ளது. இந்த பாடத்திட்டத்தை எடுப்பதற்கு, கம்ப்யூட்டர் / மொபைல் ஃபோன் மூலம் நல்ல இணைய இணைப்பு தேவை. திறம்பட இந்த பாடத்திட்டத்தை கேட்க, நான் உங்கள் ஹெட்ஃபோனை பயன்படுத்த பரிந்துரைக்கிறேன்.
மீண்டும் இந்த பாடத்திட்டத்திற்கு உங்களை வரவேற்கிறேன்.

Views: 2318
CARAJACLASSES

Mere reading of figures in a Company's financial statement may give an inaccurate or misleading picture of the Company’s performance and its financial standing in the industry. To understand any figure in the B/S or P/L account, it needs to be related to various other figures or be compared with peer group companies. Ratio Analysis helps you to understand and analyse every business - its profitability, solvency, efficiency, capital strength, liquidity, periodic performance and much more. Knowledge and use of Ratio Analysis is a must for every investor, business manager, banker, competitor, research analyst, creditor and any person taking a financial or commercial decision about the Company.

Views: 7314
Project Share The Wisdom

For details, visit: http://www.financewalk.com
Ratio Analysis, Financial Ratio Analysis in Excel
Financial Ratio Analysis
Meaning-
" The process of calculating the relationships between various pairs of financial statement values for the purpose of assessing a company's financial condition or performance is called ratio analysis."
Users of Financial Analysis
Financial Analysis can be undertaken by management of the firm, or by parties outside the firm like owners, creditors, investors and others. The nature of analysis will differ depending on the purpose of the analyst.
• Trade creditors- are interested in firm's ability to meet their claims over a very short period of time. Their analysis will, therefore, confine to the evaluation of the firm's liquidity position.
• Suppliers of long term debt- on the other hand, are concerned with the firm's long-term solvency and survival. They analyse the firm's profitability over time, its ability to generate cash to be able to pay interest and repay principal and the relationship between various sources of funds i.e. capital structure relationships. Long-term creditors do analyse the historical financial statements, but they place more emphasis on the firm's projected, or pro forma, financial statements to make analysis about its future solvency and profitability.
• Investors -- who have invested their money in the firm's shares, are most concerned about the firm's earnings. They restore more confidence in those firms that show steady growth in earnings. As such, they concentrate on the analysis of the firm's present and future profitability. They are also interested in the firm's financial structure to the extent it influences the firm's earnings ability and risk.
• Management - of the firm would be interested in every aspect of the financial analysis. It is their overall responsibility to see that the resources of the firm are used most effectively and efficiently, and that the firm's financial condition is sound.

Views: 112415
Avadhut Nigudkar

Accounting Ratios: - A ratio is a Mathematical expression that shows the relationship between various items or groups of items. When rations are calculated on the basis of accounting information, they are called Accounting Ratios.
Ratio analysis is an important technique of financial analysis. It is the process of Determining and interpreting numerical relationship between figures of the financial statements.
Thus ratios analysis is very important in revealing the financial position and soundness of the business.
Objectives of Ratios Analysis:-
1) To know the areas of the enterprise which need more attention.
2) To know about the potential areas which can be improved on.
3) Helpful in comparative analysis of the performance.
4) Helpful in budgeting and forecasting.
5) To provide analysis of the liquidity, solvency, activity and profitability of the enterprise.
6) To provide information useful for making estimates and preparing the plans for future.
Limitation of Ratio Analysis:-
1) Accounting Ratios ignore qualitative factors.
2) Absence of universally accepted terminology.
3) Ratios are affected by window- dressing.
4) Effects of inherent limitation of accounting
5) Misleading results in the absence of absolute data.
6) Price level changes ignored.
7) Impressed by personal bias and ability of the analyst.
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Views: 273861
StayLearning

For full text article go to :https://www.educba.com/ratio-analysis/ In this article of Ratio Analysis, you will learn how they can be used to analyze a company. Understand the meaning and formulas associated with Liquidity ratios, Profitability ratios, Turnover ratios, and Debt ratios

Views: 28834
eduCBA

Part five of a multipart example calculating some basic financial ratios. Part five focuses on the profitability ratios -- net profit margin, return on assets, and return on equity.

Views: 29647
Kevin Bracker

Profitability ratio, return on assets, return on common stock holders' equity, profit margin, asset turnover, liquidity ratio, solvency ratio, debt ratio, debt to equity ratio, analysis, common-size financial statements, acid test ratio, account receivable turnover, inventory turnover, asset turnover, financial statement analysis, vertical analysis, horizontal analysis, ratio analysis

Views: 1475
Farhat's Accounting Lectures

financial statement analysis, vertical analysis, horizontal analysis, ratio analysis. liquidity ratio, profitability ratio, market ratio, liquidity ratio, solvency ratio, market prospects ratio, working capital, trend analysis, common-size financial statements, acid test ratio, account receivable turnover, inventory turnover, asset turnover, gross profit, debt ratio, equity ratio, times interest earned, dividend yield. pe ratio

Views: 19413
Farhat's Accounting Lectures

AWESOME TRICK FOR SOLVING RATIO ANALYSIS QUESTIONS ...
Help you to solve any question of ratio analysis(PART 1)
Ratio analysis is a important concept for final exams as this chapter carry 4 to 6 marks. This video will help you to understand the formula's in simple language which will lead to solve any types of question in the exams.
This video is the first part of ratio analysis which covers the important sums of current ratio. This video will help you to understand the formula to solve all sums in your books related to current ratio.
I hope this video will help you to solve your practical problem.
Thanks
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Views: 50640
JOLLY Coaching

Liquidity Ratios- Calculation of Current Ratio and Liquid Ratio- By Jitender Kumar { M.Com. , M.Phil. , C.M.A.(Inter) , C.S.(Inter) , P.G.D.B.A. , P.G.D.F.M. , U.G.C.N.E.T. Qualified }
This is a channel for Financial Accounting, Corporate Accounting, Cost Accounting, Management Accounting and Financial Management. If you have doubts in a particular topic, whatsapp me that topic on my number 8447451771 or write in the comment box. I will definitely try to make tutorial for that topic.
Brief description about Mr. Jitender Kumar
Mr. Jitender Kumar is a graduate in commerce from Delhi University. He holds M.Com. and M.Phil degrees from Madurai Kamaraj University. He has also obtained Post Graduate Diploma in Financial Management and Post Graduate Diploma in Business Administration from Annamalai University. He qualified Cost and Management Accounting (C.M.A.)(Inter) in his first attempt and obtained All India Rank 48. He also qualified C.S.(Executive) in his first attempt securing first division. He qualified U.G.C.N.E.T. IN June 2012 with an enormous total of 75% marks. Besides this, he holds many certifications from National Stock Exchange(N.S.E.). Since 2002, he has taught many hundreds students.
For more videos log on to:
https://www.youtube.com/c/JitenderKumar2020
1. What does a high operating ratio indicate?
Ans. High operating ratio indicates higher operating cost of the business & thus lower operating profits are available to the firm.
2. A Ltd. and B Ltd. are two companies operating in the same field and having STR of 4 times and 5 times respectively. Which company is having a better STR?
Ans. STR of B Ltd. is better than the STR of A Ltd. since higher STR indicates efficient performance i.e. stock is being converted into sales quickly.
3. Give any two ratios judging the efficiency of a concern.
Ans. STR and DTR.
4. What do you understand by Accounting Ratio?
Ans. Accounting Ratio may be defined as a mathematical expression of the relationship between two items or group of items shown in the Financial Statements.
5. State any two limitations of Ratio Analysis.
Ans. (i) Qualitative factors are ignored.
(ii) Price level changes are not reflected.
6. State the limitation of ratio analysis regarding qualitative aspect.
Ans. As ratio are arithmetical expression, qualitative aspect cannot be presented through ratios. Therefore, in making decision with the help of ratio, almost care should be taken, as ratio is only one-sided approach to measure the efficiency of the business.
7. Name the ratios that indicate the liquidity of an enterprise.
Ans. Current Ratio and Liquid Ratio.
8. What is the ideal Current Ratio and Quick Ratio?
Ans. Ideal Current Ratio 2:1, Ideal Quick Ratio 1:1
9. How the solvency of a business is assessed by ‘Financial Statement Analysis’?
Ans. Through solvency Ratios, the solvency of a business is assessed by ‘Financial Statement Analysis’.
10. What does a low Debtors’ Turnover Ratio indicate?
Ans. It may be an indication of long credit period or slow realisation from debtors.
11. What does a low working Capital Turnover Ratio indicate?
Ans. It is an indication of inefficiency of working capital management.
12. How the ‘Earning Capacity of a business’ is assessed by ‘Financial Statement Analysis’?
Ans. On the basis of ‘Profitability Ratios’ earning capacity of a business is assessed.
13. What will be the Operating Profit Ratio, if Operating Ratio is 82.95%?
Ans. Operating Profit Ratio = 100- Operating Ratio
= 100- 82.59 = 17.41%.
14. The gross Profit Ratio of a company is 50%. State with reason whether the decrease in rent received by Rs.15,000 will increase, decrease or not change the ratio.
Ans. Decrease in rent received by Rs.15,000 will not change the Gross Profit Ratio because rent received neither effects the gross profit nor the net sales.
15. X Ltd. has a Debt Equity Ratio at 3:1. According to the management, it should be maintained at 1:1. What are the two choices to do so?
Ans. The two choices to maintain Debt Equity Ratio at 1:1 are-
a) To increase the Equity
b) To reduce the debt.
16. You are a Debenture holder of a reputed company. Mention any two ratios that you will compute to examine whether your decision was justified.
Ans. (i) Debt Equity Ratio (ii) Interest Coverage Ratio.
17. What does a higher inventory turnover ratio indicates?
Ans. A higher inventory turnover ratio indicates that finished inventory is rapidly turning into sales.

Views: 1439
Jitender Kumar

Calculation of Profitability Ratios- G.P.Ratio/N.P.Ratio/Operating Ratio/Operating profit ratio -By Jitender Kumar { M.Com. , M.Phil. , C.M.A.(Inter) , C.S.(Inter) , P.G.D.B.A. , P.G.D.F.M. , U.G.C.N.E.T. Qualified }
This is a channel for Financial Accounting, Corporate Accounting, Cost Accounting, Management Accounting and Financial Management. If you have doubts in a particular topic, whatsapp me that topic on my number 8447451771 or write in the comment box. I will definitely try to make tutorial for that topic.
Brief description about Mr. Jitender Kumar
Mr. Jitender Kumar is a graduate in commerce from Delhi University. He holds M.Com. and M.Phil degrees from Madurai Kamaraj University. He has also obtained Post Graduate Diploma in Financial Management and Post Graduate Diploma in Business Administration from Annamalai University. He qualified Cost and Management Accounting (C.M.A.)(Inter) in his first attempt and obtained All India Rank 48. He also qualified C.S.(Executive) in his first attempt securing first division. He qualified U.G.C.N.E.T. IN June 2012 with an enormous total of 75% marks. Besides this, he holds many certifications from National Stock Exchange(N.S.E.). Since 2002, he has taught many hundreds students.
For more videos log on to:
https://www.youtube.com/c/JitenderKumar2020
1. What does a high operating ratio indicate?
Ans. High operating ratio indicates higher operating cost of the business & thus lower operating profits are available to the firm.
2. A Ltd. and B Ltd. are two companies operating in the same field and having STR of 4 times and 5 times respectively. Which company is having a better STR?
Ans. STR of B Ltd. is better than the STR of A Ltd. since higher STR indicates efficient performance i.e. stock is being converted into sales quickly.
3. Give any two ratios judging the efficiency of a concern.
Ans. STR and DTR.
4. What do you understand by Accounting Ratio?
Ans. Accounting Ratio may be defined as a mathematical expression of the relationship between two items or group of items shown in the Financial Statements.
5. State any two limitations of Ratio Analysis.
Ans. (i) Qualitative factors are ignored.
(ii) Price level changes are not reflected.
6. State the limitation of ratio analysis regarding qualitative aspect.
Ans. As ratio are arithmetical expression, qualitative aspect cannot be presented through ratios. Therefore, in making decision with the help of ratio, almost care should be taken, as ratio is only one-sided approach to measure the efficiency of the business.
7. Name the ratios that indicate the liquidity of an enterprise.
Ans. Current Ratio and Liquid Ratio.
8. What is the ideal Current Ratio and Quick Ratio?
Ans. Ideal Current Ratio 2:1, Ideal Quick Ratio 1:1
9. How the solvency of a business is assessed by ‘Financial Statement Analysis’?
Ans. Through solvency Ratios, the solvency of a business is assessed by ‘Financial Statement Analysis’.
10. What does a low Debtors’ Turnover Ratio indicate?
Ans. It may be an indication of long credit period or slow realisation from debtors.
11. What does a low working Capital Turnover Ratio indicate?
Ans. It is an indication of inefficiency of working capital management.
12. How the ‘Earning Capacity of a business’ is assessed by ‘Financial Statement Analysis’?
Ans. On the basis of ‘Profitability Ratios’ earning capacity of a business is assessed.
13. What will be the Operating Profit Ratio, if Operating Ratio is 82.95%?
Ans. Operating Profit Ratio = 100- Operating Ratio
= 100- 82.59 = 17.41%.
14. The gross Profit Ratio of a company is 50%. State with reason whether the decrease in rent received by Rs.15,000 will increase, decrease or not change the ratio.
Ans. Decrease in rent received by Rs.15,000 will not change the Gross Profit Ratio because rent received neither effects the gross profit nor the net sales.
15. X Ltd. has a Debt Equity Ratio at 3:1. According to the management, it should be maintained at 1:1. What are the two choices to do so?
Ans. The two choices to maintain Debt Equity Ratio at 1:1 are-
a) To increase the Equity
b) To reduce the debt.
16. You are a Debenture holder of a reputed company. Mention any two ratios that you will compute to examine whether your decision was justified.
Ans. (i) Debt Equity Ratio (ii) Interest Coverage Ratio.
17. What does a higher inventory turnover ratio indicates?
Ans. A higher inventory turnover ratio indicates that finished inventory is rapidly turning into sales.

Views: 3939
Jitender Kumar

Financial analysis of any company from its annual reports
The annual reports are used to analyse the company’s Liquidity, Profitability, Efficiency, Capital Structure and Stock Market Performance
1. LIQUIDITY:
The high level of working capital is likely to improve a company’s liquidity and avoid running out of the cash.
1.1 Current Ratio
The company’s current ratio would be very high if it is under trading and over capitalized.
Current ratio = Current Assets / Current Liabilities
1.2 Acid Test or Quick Ratio
This ratio indicates a company’s short term debt paying ability.
Acid Test or Quick Ratio = (Current Assets-Inventories) / Current Liabilities
1.3 Working Capital Turnover
However if it is significantly higher then there could be a liquidity problem and company might be over trading with insufficient working capital.
If it is much lower, it indicates poor use of the working capital resources and shows company’s inefficient working capital management.
WC Turnover = Sales / Net Current Assets
2. PROFITABILITY:
Profitability reveals how successfully the business is trading
2.1 Return on Capital Employed (ROCE)
ROCE = Operating profit / (Equity + Noncurrent liabilities) x 100
2.2 Return on Equity (ROE) or Return on Investment (ROI)
ROE = Profit after tax / Equity x 100
2.3 Gross Profit Margin
Gross Profit Margin = Gross profit / Sales Revenue x 100
2.4 Operating Profit Margin
Operating Profit Margin = Operating profit / Sales Revenue x 100
2.5 Net Profit Margin
Net Profit Margin = Profit after tax / Sales Revenue x 100
3. EFFICIENCY
It is a good measure to see how well working capital is being managed.
3.1 Inventory Turnover Ratio
(Higher the better)
Inventory Turnover Ratio = Cost of sales / Inventories
3.2 Receivable Turnover Ratio
(Higher the better)
Receivables Turnover Ratio = Sales Revenue / Trade Receivable
3.3 Payable Turnover Ratio
(Lower the better)
Payables Turnover Ratio = Cost of purchase or sales / Trade Payable
3.4 Asset Turnover Ratio
(Higher the better)
Asset Turnover Ratio
= Sales Revenue / (Fixed Assets + Net Current Assets)
3.5 Inventory days
(Lower the better)
Inventory Days = 365 x Inventories / Cost of sales
3.6 Receivable days
(Lower the better).
Receivable Days = 365 x Trade Receivable / Sales Revenue
3.7 Payable days
(Higher the better)
Payable Days = 365 x Trade Payable / Cost of purchase or sales
3.8 Cash operating cycle (Cash Conversion Cycle)
(Shorter the better)
Cash operating cycle = Inventory days + Receivable days - Payable day
4. CAPITAL STRUCTURE
Gearing can be used to magnify the company sale.
4.1 Gearing ratio
Gearing ratio = Noncurrent liabilities / (Equity + Noncurrent liabilities) x 100
4.2 Debt to Equity ratio
There will be more risk to shareholders if this ratio is higher than 50% and 10% ratio is considered to be low risky.
Debt to Equity Ratio = Noncurrent liabilities (Debt) / Equity x 100
4.3 Interest cover ratio
More risk to shareholders if this ratio is very low as company can default on its interest payments.
Interest cover ratio = Operating profit / Finance charge
5. STOCK MARKET PERFORMANCE
These ratios are used by existing and potential investors who are deciding whether to hold, sell or buy shares in the company.
5.1 Earnings per Share (EPS)
Indicates how much profit is generated for shareholders for each share in issue.
Shown at the end of the Income Statement
5.2 Price to Earnings ratio
High Price to Earnings ratio indicates that investors are prepared to pay a very high price..
Price to Earnings ratio (P/E) = Market value per share / Earnings per share
5.3 Dividend Yield ratio
Dividend Yield is the return to the shareholders ignoring any change in the share price over an accounting period.
Dividend Yield Ratio = Dividend per share / Market value per share x 100
5.4 Dividend Payout ratio
If payout ratio is low, more money is being retained & reinvested for the future growth.
Dividend Payout ratio = Dividend per share / Earnings per share x 100
5.5 Dividend Cover
The higher the dividend cover the lower the risk that future dividends will fall below the current dividend level.
Dividend Cover = Earnings per share / Dividend per share

Views: 308
VMB

This video is suitable for CA FOUNDATION RATIO ANALYSIS | RATIO ANALYSIS CS EXECUTIVE | RATIO ANALYSIS CA FOUNDATION | CA RATIO ANALYSIS | BCOM RATIO ANALYSIS | RATIO ANALYSIS BBA | CLASS 12 RATIO ANALYSIS | CLASS 12 ACCOUNTANCY RATIO ANALYSIS | RATIO ANALYSIS CMA | RATIO ANALYSIS CA INTER | RATIO ANALYSIS CLASS 12 | RATIO ANALYSIS BCOM 2ND YEAR | LIQUID RATIO ANALYSIS | CLASS 12 CURRENT RATIO | CURRENT RATIO AND QUICK RATIO | CURRENT RATIO AND LIQUID RATIO | CS EXECUTIVE RATIO ANALYSIS | CA CPT RATIO ANALYSIS | RATIO ANALYSIS OF FINANCIAL STATEMENT | RATIO ANALYSIS ACCOUNTING | RATIO ANALYSIS CA CPT | RATIO ANALYSIS CA .
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Views: 5356
Grooming Education Academy by Chandan Poddar

Ratio Analysis
Ratio means comparison of quantitative relationship between two common variables that expresses how much bigger one is than the other.
Accounting ratio analysis is a scientific and effective tool of evaluating operating and financial position of a company by determining and interpreting quantitative relationship among variables of financial statement.
Types of Accounting Ratio
Broadly Accounting ratio has been classified into four categories:
1. Liquidity ratio
These ratios are calculated to measure the firm’s ability to meet short term obligations.
2. Solvency ratio
It is calculated to assess long term financial position of the company and ability to pay off long term obligations.
3. Turnover or Activity ratio
These ratios help to assess how efficiently a company is utilizing its resources.
4. Profitability ratio
These ratios help to assess business ability to generate profit out of sales and expenses incurred on generation sales.
Types of Liquidity ratio
I. Current ratio = Current Asset ÷ Current Liability (2:1 is ideal)
II. Liquid ratio/ Quick ratio/ Acid Test Ratio = Liquid or quick asset ÷ Current Liability (1:1 is ideal)
Note:
Current Asset = Current Investment + Inventories (excluding spares & loose tools)+Net Trade receivables (Trade Receivable - Provision for doubtful debts and discount on debtors) +Cash & Cash equivalent+Short term loans & advances+Other current assets such as Prepaid expenses, Accrued income, Interest receivable, advance tax
Current liability = Short term borrowing +Trade payables+Short term provisions+Other current liability such as Outstanding expense, Income received in advance.
Liquid Asset = Current asset – Inventory – Prepaid expense
Working Capital = Current Asset – Current Liability
LINK FOR VIDEO 1 - INTRODUCTION TO RATIO ANALYSIS & LIQUIDITY RATIOS VIDEO
https://youtu.be/ZQafR3kiruo
LINK FOR VIDEO 2 - SOLVENCY RATIO FORMULA
https://youtu.be/92p3HRm6o3k
LINK FOR VIDEO 3 - ACTIVITY RATIOS FORMULA
https://youtu.be/yYTpTuBEU5Q
LINK FOR VIDEO 4 - PROFITABILITY RATIOS FORMULA
https://youtu.be/ePAzJNGFF-I
LINK FOR NOTES ON RATIO ANALYSIS
http://gyanvikalpa.blogspot.in/search/label/financial%20ratio
LINK FOR ALL NOTES OF ACCOUNTS:
www.gyanvikalpa.blogspot.in
LINK FOR CASH FLOW STATEMENT VIDEOS
VIDEO 1. CASH FLOW INTRODUCTION
https://youtu.be/WHYYpgkwIuw
VIDEO 2. CASH FLOW STATEMENT FORMAT
https://youtu.be/xyy_nj0Kk-o
VIDEO 3. CASH FLOW ADJUSTMENT ENTRIES
https://youtu.be/8I82xJ3CGxo

Views: 1916
Gyan Vikalpa

The Finance Coach: Introduction to Corporate Finance with Greg Pierce
Textbook:
Fundamentals of Corporate Finance
Ross, Westerfield, Jordan
Chapter 3: Working With Financial Statements
Objective 3 - Key Concepts:
Short-Term Solvency Ratios (Liquidity)
-Current Ratio
-Quick Ratio
-Cash Ratio
Long-term Solvency Ratios
-Total Debt Ratio
-Debt To Equity Ratio
-Equity Multiplier
-Long Term Debt To Equity Ratio
-Times Interest Earned Ratio
-Cash Coverage Ratio
Asset Management Ratios
Days Sales Outstanding
-Inventory Turnover Ratio
*X Turnover Ratio = Sales/"X".... with the exception of Inventory Turnover
Profitability Ratios
Net Return on "X" = Net Income/"X"
Market Value Ratios
-Price Earnings Ratio
-Earnings Per Share
-Market to Book Ratio
More Information at: http://thefincoach.com/

Views: 2735
TheFinCoach

Profitability ratios are financial metrics used by analysts and investors to measure and evaluate the ability of a company to generate income (profit) relative to revenue, balance sheet assets, operating costs, and shareholders’ equity during a specific period of time.
Click here to learn more about this topic: https://corporatefinanceinstitute.com/resources/knowledge/finance/profitability-ratios/

Views: 4045
Corporate Finance Institute

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Dr. John Daniel McLellan

This Ratio Analysis Masterclass covers all important ratios. You will learn-
1) Ratio Analysis Basics.
2) Advantages of Ratio Analysis.
3) Format of Balance Sheet for Ratio Analysis.
4) Liquidity Ratios.
a) Current Ratio.
b) Acid test Ratio.
c) Absolute Liquid Ratio.
5) Turnover Ratios.
a) Inventory Turnover Ratio
b) Debtor Turnover Ratio (Debtors Velocity)
c) Creditor Turnover Ratio.(Creditors Velocity)
d) Assets Turnover Ratio.
6) Solvency Ratios.
7) Profitability Ratios.
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THE MIDDLE CLASS INVESTOR

http://www.subjectmoney.com
http://www.subjectmoney.com/definitiondisplay.php?word=The%20Current%20Ratio
This is the first video of a video series covering financial ratio analysis. In this video we introduce what financial ratios are and how they are used in financial analysis of a publicly traded company. We use financially analyze Bed Bath and Beyond BBBY and Pier 1 PIR. In this video we also introduce liquidity ratios and teach in detail about the current ratio.
The current ratio is a liquidity ratio used to determine how well a company could pay off its short-term liabilities with its short-term or "current" assets. Current assets are cash and other assets that can easily be converted to cash (within 12 months). Since current assets can quickly be converted to cash, if a company was required to pay all of its current obligations, it should be able to convert all current assets into cash in order to meet its short-term obligations. The current ratio can be defined as total current assets divided by total current liabilities.

Views: 91373
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