#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
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Thank you very much sir. But the Current Assets/Current Liabilities will give different results and different conclusions than the Current Liabilities/Current Assets. Whereas in the example that you gave, changing the sides of Assets and liabilities will not give different result. I, therefore, find that the example of balance sheet does not logically fit for the justification of using the same formula i.e. current asset/current liabilities rather than using current liabilities/current assets.
Sir I am belong to pakistan (Khaber Pakhtoon Khawa) and i m watching you accounts lectur .we prepaerd the balance sheet like this Asst Lift side and Liabilaty Right side .and A Company account Liabilty is the Lift and Asset is the Right side.Because of the Pakistan Accountency law. and almost we are looking Indian Books .Because they have more conceptual.
Sir i have a question for you
Profit after tax = Rs.270000
Preference dividend paid = Rs.27000
Market price per share = Rs.40
Equity Dividend per share = Rs.2
Calculate 1.Dividend Yield on Equity (2).Cover for Preference Share (3) Cover for Equity Dividend
(4) Earning per Share (5) Price Earning Ratio
Thanks Sir it really helped :)
And BTW in Pakistan we use both formats of balance sheet its up to the teacher because some teachers teach with the books written by Indian Authors and some use Pakistani Authors material, but it only lasts till 12th Standard or B.com in some cases after that everyone have to learn and apply Statement of Financial Position format designed by IAS 1 and IFRS (We don't use GAAP).
Nai yaar jo Teachers Indian Author ki books se parhatay hain wo Assets ko right pe likhtay hain warna maine jitne bhi teachers se parha hai sub Assets ko Left par aur Liabilities aur Capital ko Right par likhtay hain.
Apka pata nahi aap konsi class me ho lekin agar aap professional accounting ki taraf aoge to apko pata chalayga dono formats me koi farq nai hai aur advanced level par sub IAS aur IFRS ke formats hi follow karte hain 11th aur 12th ki Balancesheet ko nai.
You can search Statement of Financial Position according to IAS 1 on the internet if you want.
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