ACCOUNTING RATIOS

ACCOUNTING RATIOS

1. Coverage ratio

2. Long term solvency ratio

3. Short term liquidity ratio

4. Special ratios

5. Efficiency ratio or Turnover ratio

6. Investing ratio

7. Super Quick ratio: ability of co. to repay its CL with near cash available

8. Stock to WC ratio: extent to which WC is blocked by cl. stock

9. Quick ratio: Ability of Co. to repay its immediate liabilities using QA

10. Current ratio: ability of co. to repay CL using CA

11. Std. = 2:1

12. Std.= 1:1

13. Absolute liquidity ratio, cash ratio, cash reservoir ratio

14. high ratio = low liquidity & vice versa

15. Debt equity ratio: proportion of funds belonging to outsiders with respect to shareholders

16. Proprietary ratio: extent to which total assets are financed by shareholders

17. Fixed asset to proprietary ratio

18. Capital gearing ratio: change in returns of equity shareholders funds when there is change in returns on capital employed in business

19. >ratio= poor long term solvency & vice versa

20. >ratio= >fluctuations in returns to eq. sh.= >risk & vice versa

21. Return on eq. share capital : how much returns eq. sh. have earned during the yr on share capital on % basis

22. Return on equity: how much returns equity shareholders have earned during the yr on their investments on % basis

23. Return on shareholders funds: how much returns shareholders have earned on their investments on % basis

24. Return on Capital employed: how much returns business earned during the yr on % basis wrt capital employed

25. GP ratio: GP/SALES *100

26. Operating profit ratio : Op.profit/Sales *100

27. Operating ratio: reciprocal of op. profit ratio

28. Turnover ratio: how efficiently den. is used for generating sales

29. Debtors t/o: how many times debtors were turned over or cash was collected from them

30. Creditors t/o: how many times creditors were turned over i.e. cash was paid to suppliers

31. Stock turnover ratio: how many times stock was turned over i.e. purchased stock was sold.

32. Avg. collection period

33. Avg. payment period

34. Avg. holding period

35. Interest coverage ratio: how many times interest liability of the firm is covered with operating profits of the firm

36. Pref. dividend coverage ratio: measure ability of firm to pay fixed pref. dividend & states how secure pref. dividend us in relation to earning capacity of the co.

37. Debt service ratio: ability of company to pay instalment + interest

38. Dividend Payout ratio

39. Book value per share = Eq. sh. funds / No. of eq shares

40. P/E multiple

41. Earnings yield ratio

42. Dividend yield ratio

43. Retention ratio

44. DPS

45. EPS