Great Types Of Ratios In Management Accounting
The ratios in terms of which the deviations or variances are expressed are known as Control Ratios.
Types of ratios in management accounting. As we have seen earlier that there is a wide variety of financial ratios available. There are two types of leverage ratios. It is also known as Actual Usage of Budgeted Capacity Ratio.
Liquidity Ratios Solvency Ratios Activity Ratios and Profitability Ratios. Management needs higher profits to pay dividends and reinvest a portion in the business to increase the production capacity and strengthen the overall financial position of the company. There are mainly 4 different types of accounting ratios to perform a financial statement analysis.
About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy Safety How YouTube works Test new features Press Copyright Contact us Creators. Gross profit GP ratio. They fall into many categories and if variations are included there are hundreds of types of ratios that are common in practice.
Importance of Different Ratios to Different User Groups. Structural ratios are based on the proportions of debt and equity in the capital structure of the firm whereas coverage ratios are derived from the relationship between debt servicing commitments and sources of funds for meeting theses obligation. Net profit NP ratio.
These Control Ratios are. However all the ratios are not used by everyone on a regular basis. A financial ratio is a mathematical expression demonstrating a relationship between two independent or.
They are structural ratios and coverage ratios.