Profit Margin Ratio:
Profit margin ratio represents the profitability of the given product. The formula to calculate profit margin ratio is,
Debt Ratio:
Debt ratio represents the capability of the company to pay its liabilities utilizing its assets. The formula to calculate debt ratio is,
Gross Margin Ratio:
Gross margin ratio measures the degree of profit earned by company by selling its inventory. The formula to calculate gross margin ratio is,
Acid Test Ratio:
Acid test ratio represents the capability of the company to pay its current liabilities by utilizing its quick assets, that is assets which be turned into cash within 90 days. The formula to calculate quick acid ratio is,
The formula to calculate quick assets is,
Accounts receivable turnover measures how frequently company recovers its receivables. The formula to calculate accounts receivable turnover is,
Basic Earnings per Share:
Basic earnings per share are a share of profit allocated to every outstanding share of stock. The formula to calculate basic earnings per share is,
Inventory Turnover Ratio:
Inventory turnover ratio is a tool to evaluate the number of times a company sells and change its inventory and how effectively company satisfies its orders. The formula to calculate inventory turnover is,
Dividend Yield:
Dividend yield is the dividend paid on share in comparison to its price. The formula to calculate dividend yield is,
To identify: Change in ratio to be classified under favorable and unfavorable.
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Financial and Managerial Accounting
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