G/P ratio = Gross Profit *100
Net Sales
2) Operating ratio:-
Cost of goods sold + operating exps *100
Net sales
a) Cost of goods sold = Opening stock + Purchase + Direct exps + Manufacturing Exps – Closing stock or Sales – G/P.
b) Operating exps = Administrative + Selling & distribution exps.
3) Expenses Ratio:-
a) Material consumed :- Material Consumed *100
Net sales
b) Conversion cost :- Labour exps + Manufaturing Exps * 100
Net sales
c) Administrative Expenses Ratio :- Administrative Expenses Ratio * 100
Net sales
d) Selling & Distribution Expenses :- Selling & Distribution Expenses *100
Net sales
e) Operating Profit Ratio :- Operating Profit *100
Net sales
OP=GP+Operating Income-Operating Exps
f) Net Profit Ratio :- Net Profit *100
Net sales
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4) Return on Capital Employed :- N/P * 100
Capital Employed
a) Net Profit :- N/P after depreciation before interest on fixed liabilities dividend on shares and taxation.
b) Capital Employed :- Fixed Assets + Current Assets – Current Liabilities
OR
Equity Shares + Preference Share + Undistributed Profit + Reserves & Surplus + Fixed Liabilities – Fictitious Assets
5) Return on Share Holders :- N/P *100
Shareholders Funds
a) Net profit :- N/P after payment Taxes, Interest on long term liabilities & Preference dividend.
b) Share holder Fund :- Equity Share Capital + Preference Share Capital + Capital Reserve +Revenue Reserve.
6) Return on Total Assets :- N/P After Tax *100
Total Assets
7) Debt Service Ratio :- N/P Before Interest & Tax
Interest on fixed debenture
8) Earning per Share :- Net Income – Preference Dividend
Number of Equity Shares
9) Price Earning Ratio :- Market Price Per Equity Share
Earning per Share
10) Payout Ratio :- Dividend per Equity Share
Earning per share
11) Dividend Yield Ratio :- Dividend Per Share *100
Market Price Share
12) Turn Over Ratio :-
a) Capital Turn Over Ratio :- Sales
Capital Employed (Shareholder fund +long term Liabilities
b) Fixed Assets Turnover Ratio:- :- Sales *100
Net fixed Assets
c) Working Capital Turnover Ratio :- Sales * 100
CA -CL
d) Total Assets Turnover Ratio :- Net Sales *100
Total Assets
e) Stock Turnover Ratio :- Cost of Goods Sold
Average Stock (Op+Clo stock)
2
f) Debtors / Receivable Turnover Ratio :- Net Credit Sales
Average Drs (op Dr/Bill Receivable + clo Dr’s/ Bills Payable)
2
Collection Period = 365/DTR
g) Creditor’s Turnover Ratio :- Average Credit Purchase
(Creditors + B/P)
h) Average Payable :- Month/Days in a year
Creditors Turnover Ratio
13) Financial Ratio
i) Current Ratio :- Current Assets
Current Liabilities
j) Liquid Ratio :- Quick Assets
Current Liabilities
k) Absolute Liquid Ratio :- Cash in Hand & Bank +Short Term Securities
Current Liabilities
14) Inventory Turnover Ratio :- Inventory/Working Capital
Working Capial= Current Assets- Current Liaballities
15) Fixed Assets Ratio :- Fixed Assets
Capital Employed
16) CA to Fixed Assets :- CA/FA
17) Debt to Equity Ratio :- Long Term Debts
Shareholders Funds + Long Term Debts
a) Proprietary Ratio :- Shareholder Funds
Total Assets
18) Capital Gearing Ratio :- Fixed Interest Bearing Securities
Equity Share Capital
19) Leverages Ratio
a) Operating Leverage :- Marginal Contribution
Earning Before Interest & Tax (EBIT)
MC= Sales-Variable Cost EBIT=Marginal Contribution- Fixed Cost
b) Financial Leverage :- EBIT
Earning Before Tax (EBT)
EBT= EBIT- Interest
C) Combined Leverage :- Operating Leverage * Financial Leverage
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