Wonderful Ratio Analysis And Interpretation Pdf
111 Use and significance of ratio analysis- The ratio is one of the most powerful tools of financial analysis.
Ratio analysis and interpretation pdf. Stock analysts assess the companys efficiency risk and growth prospects through ratio analysis. To make comparisons between various companies Users of Ratio Analysis Management Shareholders both existing and potential Lenders both existing and potential Customers. A ratio is statistical yardstick by means of which relationships between two or various figures can be compared or measured.
Because bigger number indicates that the company has more current assets for every rupee of its current liability. Gross profit on cost of sales Profitability 3. OBJECTIVES To understand analyze and interpret the basic concepts of financial statements of different mining companies.
In view of the needs of various uses of ratios the ratios which can be calculated from the. The debt ratio for The Vanguard Group comes to 53 as the liabilities were 666250 and total OPTION 1. Ratio analysis is a technique which involves regrouping of data by application of arithmetical relationships.
Khan and Jain define the term ratio analysis as the systematic use of ratios to interpret the financial statements so that the strengths and weaknesses of a firm as well as its historical performance and current financial conditions can be determined 13 Procedure for computation of ratios Generally ratio analysis involves four steps. Financial analysis is the process of using fi nancial information to assist in investment and fi nancial decision making. Advantages of Ratios Analysis.
The bigger is the ratio the better. Bank loan officers and bond rating analysts analyze ratios to ascertain a companys ability to pay its debts. INTERPRETATION OF ACCOUNTS RATIO ANALYSIS Introduction ratio analysis is a method traditionally used by people who wish to understand more fully the nancial statements and performance of an entity.
The term interpretation means explaining the meaning and significance of the data so simplified. It is used as a device to analyze and interpret the financial health of enterprise. The ratio of apples to oranges is 200 100 which we can more conveniently express as 21 or 2.