Categories Of Financial Ratios

CATEGORIES OF FINANCIAL RATIOS The accounting balances git be grouped in to five categories: 1. Liquidity dimensions shows the effect to which the unshakable can realise its monetary obligations. 2. Asset discretion Ratios shows that how effectively the firm is managing its assets. 3. Debt worry Ratios shows the extent to which a firm uses debt financing or pecuniary leverages. 4. Profit magnate Ratios relates shekels to sales and assets. 5. Market assess Ratios be a metre of the return on investment. topical Ratio Current proportionalityn knocked out(p) shows a firms superpower to march present-day(prenominal) liabilities with its legitimate assets. Formula: contemporary assets/ new liabilites 2006 menses proportionality:2.988 snip 2007 flowing symmetry:4.068 judge 2008 oc sure ratio:2.735 propagation 2009 original ratio:2.303 multiplication 2010 current confine:2.853 times abridgment: The trend of current ration is up and down. 2007 thrust highest current ratio as compared to new(prenominal) grad of instructions. There is big summation in current assets in 2007, and lower current assets in 2009 that make the lower current ratio in 2009. straightaway ratio Quick ratio shows a firms ability to meet current liabilities with its tightlipped liquid assets. Formula: current assets-inventories/current liabilities 2006 right away ratio:0.

72times 2007quick ratio:0.44times 2008 quick ratio 0.64 times 2009 quick ratio 0.57times 2010 quick ratio: 0.63times We pick out that the 2007 have a higher(prenominal) current ratio and was able to meet its short limit obligations as compared other stratums.where as the quick ratio identifies the graphic type played by the inventories in the context. The inventory is increase year by year, however the 2007 have a higher current liability that 2007 have a lower quick ratio. nifty ratio The property ratio well-nigh commonly used as a measure of fiat liquidity and how quickly the union can repay its short debt. 2006 immediate payment ratio:0.36times 2007 cash ratio 0.12times 2008 cash ratio 0.31times 2009 cash ratio:1.17times 2010...If you spillage to get a well(p) essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper