\ cH Accounting Ratios, Formula Sheet i A ceounting Ratirs are broadly Classified into Y Ratios :- By (3) Liquidity Ratio = T+ ‘includes : & (Caltvenk Rate = Corrent Assets [Hal Ratio =2 1] Cument Uab- * ' Note: While calculating Cuvrent Ratio or CR, don’t Anclude loose tools ‘in the Lusvent Assets Wi) Quick Ratio = Quick Asset/ Liquid Assets UT at & 7 Coment Liab also known 24, ; Acad Jot Ratio, \Qaick Assets = CA — Inventory - Prerat Liquid Ratio Liquia’ Assets (closing) of Some additional formulas : ema an > CL = Total pebts - Long term Debts (Total Uabititia - Non cL) Wor king Copitalt CL Total Asseb - Fined Assets > CA Totet Arseb [Liab — Gip Employed > eeCapital bmpoyed + CL — ian Assets CT Lor 1A) Share Gp —,, B> Equity / Shareholders Jund= Equity share Cpt Prcjerence share + R4+ Surpl > Equity = Total psseb —Tolal debts ie [ > ao Employed = Shoneholders quad + ra i” ret cL) erik pan Debts = long oa bori00ing y erat Lonsy a provisions Long term Debid = Total debts - ce > Capital Employed = Fined Assets - WC (R) Liquidity Ratio = Tt includes - : Tae EMO | aad team debts a nee Debt (I) Debts to luo, DAE % shareholder’ jund Note” : Long tevm debts includes : > Long term loanys > Long term d eten tures a eee > Long term Provisions Sha Pp > Shave holdew’s fund = Equity Share Gp + Preference Shore Cap + Rorerves 4 Surplus > Long tem Debts Total Debts - Cument Liab> Shove holdey’) vane Total Arsels —total rebt @ () Total Assets to Debt Ratlos Total Assets Long term Debts Note™ : Total Assets = Total Liabitity So, 1 ‘i given Total Liability thin, Total Liabii ty Con te used to luilite the ratio. "2? % Total Assetd= Fined Asseb + Investment + (urent Avels > Totah Assets = Long term pebts + Shareholdors Jund+ ot 5: = Liability Current Labi tite > Loney term Debt» = Total Debts — Current Liabilities (WY) froprictary Rotio : — Shaseholder’s dand | ba uity Total Assets 7 Total Assets = non Current Assets + Current Assets (iv) Interest (overage Ratio > Net Profit before Int 4tam Int on long term jund. > Nek Part ‘ae Int 4 tan = Net Profit after tant tnt + Tan. Casning bejore Trt }tan a Mea”) Dbl to Gal bye fal mest Cap: Employed > Capital Employed = Total pssets- CL > Capital Cmeloyed = Net dined Arsets + Net we } () Activity Ratio + 1 tneludes : ()) Tnventory Turnover Ratio Cort A goods Sold Avg- ‘nventory > Avg: Inventory = Opentng “Inventory + Claing Inv. a Note? : 1} giveh only closing Tnverbry sto, thon it is treated ar Average Invenio There) no need to divide it by 2- > Cost ef goods sold =. Soleieme pee L ok Gfeero) Croft Grout ov Coot e} Rewenu drom opeaution Note* ac, given REO. ten ture 1d ho need to subhatt sally retuan rom it Net furchase (Purch: - Pusch yelurn) > COGS = Op. Stock + Purchages + Direct Exp - cl Sect Direct enpenses Includes Wages. Corvriage invoards/ a inwards, Manujacting or Jattory enp, wage } 3a lasie~ Wao TTL LMA GQ) Trade Attievable tusnoves Ratio s ee eile © Pn Reievably = Net Cy-Sales [ Revenue trom Operation ones WCwRMRRE AME. UE Upeeh go Deb tors Average Trade Revievablos BIR ? Averege Dade Ruevably= Op. TR + Cl-TR Za Note* Provision Jor Doubtful Debts (Db) is not reduued from Dade Recievabley. 7 Nek Credit Saly= Total Saler - (aoh Sales CNet Sales)= sale - sales retuan ? Opening Trade Recievablen = Closing Trade Revita bles — Cu ef Closing Trade Rec OVEX Open. Trade Ririevable > Average Collection Period = | ox Debt Collection Period x12/365 TRTR Cetonths) (Dewys) (i) Trade fayable Turnover Ratio = Net Cr furchase Average Trade faxyable ; Trade fay ables Creditors 7 Average Trade, Payable = GIP = Of Ueew ie Zeaoe >Nek Credit Purchase = Total Purchaye - Goh ee G Crtet furchoae)= furchase- Purch . yeu iB Note”: In both TRTR o TATR, Uf given Closing TR/ Closing Tf only, then thir would be Considgsed ad Avermye TRITP, there 1) no netd to divide it by De ay) Working Gpital Tumover Ratlo = Net Sale Net WC > Ne Sales = REO on Coot &} Revenue or Cost €| goods Sold > th) Ca er a Ce > Wl = Capital Employed- Net fined Assets (x) Fined Assets Turnover Ratio > REO Net fined Assets 7 WC = Capital bmployed - Net dined Assets ov > nied fined Asse = Capital binp - WC.MNCL AKT Wi) Net Assets Turnover Ratio x RFO o Capital Employed Turnovey Ratio Capital Emp: : (4) Profitability Ratio :- It includes : Gl) Cor0s Profit Ratio :- ta P ra ees asl ie | Net Sciley (RFO) Bact Rh EOR= (lost Revenue (Sales - COGS). (i) Operating (at Ratio :- _oferefing OF oo oF Net Sales Operating Ratio (REO) ; ‘00 + Opera ng Enpere > o¢erating (pt = Cost ef 9 ds Sold ae ce ot Gost qf RENAE O [fice 4 Aa ministe Sel fing ¢ Dishibutir (ii) Operetta Prefit Ratio = Operating Fret gg Net Saley > operating Preyit = perl = operating Coot > operating frofid = Net Prelit = Non operating income + Non Ofevating Crp. >| oresaing (ost Ratio + Oerating Crefit Ratio = loo |TU. CS) | iv) Met frolit Ratio « i CY Net Profit Ratio Net Prefit 56 ee. hee 7 Net Profit = Gress Profit - Operating Enp - Non operating Ene + Non operating Tnuome 7 Net brett = Coanys Frafit - All indirect enp + All income | (vy): Return on eras Cro ployed Ratio ;- Net Prelit bore Inigtan. ee Prelit wines duns (00 Coretta Emp Rvurn on ed Ratio Tue Eno |!