Ratio

Ratio is a useful measuring tool as a part of financial statement analysis. It usually categorized as three kinds that named liquidity ratio, solvency ratio and profitability ratio, each ratio assist in valuing the efficiency and profitability of a company based on its annual financial report.  Liquidity Ratio Liquidity ratio is the tool for measuring the ability of a company to repay the short-term debt. The working capital of the fiscal period of 2011-2013 continued to increase, this fluctuation

Turnover their asset 2.5 times a year, which means Johns Corp, has been able to turn a profit to good return on assets. Both Companies have been successful in maintaining more assets than liabilities thus, Both has been successful in sustaining quick ratio above 1.0 ,Thus ensuring that Cash, Cash Equivalents and account receivables are more than liabilities at the end of financial year. John’s assets turnover is more than Smith Corp, which shows the management capabilities of effectively utilizing their

renewed. Figures were obtained from comparative balance sheets and profit and loss statements from the relevant years as well as additional information that was forwarded by the board. This information enabled the development of percentage and ratio analysis (see appendices), which was then used to create the report. The investigation revealed that the company had

Gross profit Gross profit ratio= ----------------- X 100 sales 15. Net Profit Margin Net profit is obtained when operating expenses; interest and taxes are subtracted from the gross profit. Net profit margin ratio is measured by dividing profit after tax by sales: Net Profit Net Profit Ratio = --------------- X 100 Sales Net profit ratio establishes a relationship between net profit and sales and indicates and management’s in manufacturing, administrating and selling

One good example of a financial ratio is the net profit margin, which is used to compare the net income of a business with its net revenue to find out the profit of a specific business earned. This ratio helps the business to know its profit position compared to other businesses in the same industry, and also realise if its profitability is growing or decreasing over different periods of time. Financial ratio analysis is a very important tool in any business; it makes the process of financial comparison

GROUP 1 REPORT FINANCIAL RATIOS Financial ratios are useful indicators of a firm’s performance and financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios can be used to analyze trends and to compare the firm’s financials to those of other firms. In some cases, ratio analysis can predict future bankruptcy. SOURCES OF DATA FOR FINANCIAL RATIOS     Balance Sheet Income Statement Statement of Cash Flows Statement of Retained

FINANCIAL RATIOS LIQUIDITY RATIOS Current Ratio: = current assets / current liabilities ▪ The higher the ratio, the greater the "cushion" between current obligations and a firm 's ability to meet them. ▪ Use: An indication of a company 's ability to meet short-term debt obligations; the higher the ratio, the more liquid the company is. Current ratio is equal to current assets divided by current liabilities. If the current assets of a company are more than twice the current liabilities

regards to the balance sheet, there are financial ratios that can be computed in order to determine the profitability, liquidity, and solvency of a company. Both Ford and Tesla are large car companies that have lots of assets. By examining the current ratio for both companies, accountants, investors and creditors can assess the liquidity and efficiency for Tesla and Ford to pay off their short-term liabilities with its current assets. The current ratio is a very significant measure tool as these short-term

Financial Results FIN/571 July 22, 2013 Interpreting Financial Results Liquidity: Current Ratio Parrino, Kidwell, & Bates (2012) detail the current ratio as current assets divided by liabilities. The current ratio identifies a firm’s potential to pay short-term liabilities; higher liquidity is a good sign for potential creditors (Parrino et al., 2012). At the same time, however, the current ratio should not greatly exceed benchmarks of other competitors (Parrino et al., 2012). This could be

Starbucks Debt Ratio & Debt to Equity Ratio Parameters Used Starbucks' Short Term Liabilities $2, 075, 800, 000 Starbucks' Long Term Liabilities $899, 700, 000 Starbucks' Market Value of Equity (Market Capitalization) - $39, 980, 000, 000 a) Debt Ratio Debt Ratio = Total Liabilities/Total Liabilities + Equity Using Total Liabilities Debt Ratio = $2, 975, 500, 000/$2, 975, 500, 000 + $4, 384, 900, 000 = 0.40 Using Short-Term Liabilities Debt Ratio = $2, 075, 800, 000/$2, 075, 800, 000 +