Accounting Ratios English is popular PDF and ePub book, written by Navneet Singh in 2024-09-20, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Accounting Ratios English can be Read Online from any device for your convenience.
Accounting Ratios English Book PDF Summary
Accounting Ratios Accounting ratios, also known as financial ratios, are metrics used to evaluate a company's financial performance, efficiency, liquidity, solvency, and other aspects of its operations. They provide insights into various aspects of a company's financial health and help stakeholders make informed decisions. Here are some common types of accounting ratios: Liquidity Ratios: Current Ratio: Current assets divided by current liabilities. It measures a company's ability to cover short-term liabilities with short-term assets. Quick Ratio (Acid-Test Ratio): (Current assets - Inventory) divided by current liabilities. It assesses the company's ability to meet short-term obligations without relying on the sale of inventory. Profitability Ratios: Gross Profit Margin: (Gross profit / Revenue) * 100. It measures the percentage of revenue that exceeds the cost of goods sold. Net Profit Margin: (Net profit / Revenue) * 100. It indicates the percentage of each dollar of revenue that results in net profit after all expenses are deducted. Efficiency Ratios: Inventory Turnover Ratio: Cost of goods sold / Average inventory. It measures how many times a company's inventory is sold and replaced over a period. Accounts Receivable Turnover Ratio: Net credit sales / Average accounts receivable. It indicates how quickly a company collects its accounts receivable. Solvency Ratios: Debt-to-Equity Ratio: Total debt / Total equity. It measures the proportion of debt and equity used to finance a company's assets. Interest Coverage Ratio: Earnings before interest and taxes (EBIT) / Interest expense. It evaluates a company's ability to pay interest on its outstanding debt. Market Value Ratios: Price-to-Earnings (P/E) Ratio: Market price per share / Earnings per share (EPS). It compares a company's current share price to its earnings per share. Price-to-Book (P/B) Ratio: Market price per share / Book value per share. It compares a company's market value to its book value. These ratios are essential tools for investors, creditors, and management to assess and compare the financial performance and health of a company over time or against its peers.
Detail Book of Accounting Ratios English PDF
- Author : Navneet Singh
- Release : 20 September 2024
- Publisher : Navneet Singh
- ISBN : 978186723xxxx
- Genre : Business & Economics
- Total Page : 33 pages
- Language : English
- PDF File Size : 13,8 Mb
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