Awesome Formula For Ratio Analysis
Financial ratios are often divided up into seven main categories.
Formula for ratio analysis. Liquidity solvency efficiency profitability market prospect investment leverage and coverage. Cash 15 million. Ratios allow us to compare companies across industries big and small to identify their strengths and weaknesses.
Current Ratio Current Assets Current Liabilities. 2 Feb 19 at 1239 pm. To see the soundness of the long-term financial policies of a business the debt-equity ratio can be used.
Net profit after tax x 100 Net sales. When i entered formula in Cell C2 I get NAME. The Current Ratio formula is.
Return on Equity Net Income. Earnings per share Net income - Preferred dividend weighted average number of sales outstanding x 100. Gross Profit x 100 Net sales.
Efficiency RatiosStock TurnoverLow ratio poor sales and therefore excessive inventoryHigh ratio strong sales or effective buying. If you want to know how much of your investment is going towards generating profits you can calculate it using the formula for the return on equity ratio which is. Efficiency RatiosStock Turnover Number of DaysCalculates the days it takes to sell the stock and how many days worth of stock is held by the business.
A higher ratio will be due to the result of one or more of the following factors. Debt-Equity Ratio fracTotal LiabilitiesStakeholders Equity. If a business holds.