# Tag: ratio analysis

Management Accounting

## Overall Profitability Ratios | Explanation | Formulae | Significance

Overall Profitability Ratios Profit is used as a yardstick to measure the profitability of any business concern. Generally, an analyst calculates overall profitability ratios before giving any recommendation to …
Management Accounting

## Market test or Valuation ratio | Explanation | Formula

Market test or Valuation Ratios The followings are the market test or valuation ratios. Dividend Yield Ratio. Dividend Payout Ratio or Payout Ratio. Price Earning Ratio or P/E Ratio …
Management Accounting

## Creditors or Payable turnover Ratio | Formula | Significance

Creditors or Payable turnover Ratio A business concern may not purchase its all items on cash basis. Sometimes, there may be credit purchase. This ratio is calculated to find …
Management Accounting

## Average Collection Period Ratio | Formulae | Significance

Average Collection Period Ratio is otherwise called as Average Age of Debtors. The term average collection period refers to the number of days waited to receive the amount from …
Management Accounting

## Debtors or Receivables Turnover Ratio | Formula | Significance

Debtors or Receivables Turnover Ratio It is otherwise called as Debtors Velocity. All the goods can not be sold on cash. There may be some credit sales. The credit …
Management Accounting

## Defensive Interval Ratio | Formula

What is Defensive Internal Ratio? Defensive Internal Ratios is otherwise called as Basic Defensive Interval Ratio and Internal Measure Ratio. This ratio is calculated to find out whether liquid …
Management Accounting

## Inventory or Stock Turnover Ratio | Formulae | Significance

Inventory or Stock Turnover Ratio Inventory or Stock Turnover is otherwise called as stock velocity. It indicates whether the inventory has been used effective or not. The very purpose of …
Management Accounting

## Quick Ratio | Super Quick Ratio | Formulae | Significance

Quick Ratio | Acid Test Ratio | Liquid Ratio Quick ratio may be defined as the relationship between quick / liquid assets and current or liquid liabilities. Liquid assets …
Management Accounting

## Capital Structure or Leverage Ratios | Formulae

Capital Structure or Leverage Ratio Capital structure refers to the degree of long term financing of a business concern as in the form of debentures, preference share capital and …
Management Accounting

## Ratio analysis | Objectives | Utility | Uses or Role

Ratio analysis serves the purposes of various interested parties of the financial statements. The interested parties are top management, shareholders, creditors, employees, government and tax authorities. With the use …