Activity Ratios
Jennifer edwards What are Activity Ratios? Activity ratio is the ratio or the measure of the ability of an organization to convert the accounts of the balance sheet into revenues. Activity ratio…
Back End Ratio
Back end ratio is the calculation of the part of the income of an individual or a business that is used to pay the debts. From an individual point of…
Analysis of Current Ratio
The measure of the liquidity of a firm over a certain date or for a certain period of time is called current ratio. The maintenance of current ratio is very…
Price to Earnings Ratio
The price to earnings ratio is the ratio that evaluates the shares produced by the company in the market. The price of earnings ratio is the ratio between the prices…
Dividend Yield Ratio
This the ratio of the dividend calculated per share to that of the share price of each share. The dividend ratio indicates the percentage of amount an investor or a…
Efficiency Ratio
Efficiency ratios are the measure of the degree of the efficiency of a business. Each business runs while utilizing its assets and managing its liabilities. Efficiency ratios of a business…
Price to Sale Ratio
The price to sale ratio can be defined as a ratio that compares its stock price to the total revenues of that company. This ratio helps in the valuation…
Interest Coverage Ratio
It is the ratio between the EBIT and the total interest paid by the company. The ratio shows the total interest expense of the company that is subtracted from its…
Long Term Debt to Total Assets Ratio
It is a tool to analyze the financial condition of a company. This is a ratio of that calculates the percentage of the assets of the business that are financed…
Key Ratio
In order to get a clear picture of the current financial position of a company a tool that is used is called key ratio. It is a ratio that gives…
Bond Ratio
A bond ratio is one of the most important ratios in accounting and express the leverage associated with the issuer of the bond. In other words bond ratio can…
Contribution Margin Explained
It can be defined as the marginal profit earned by a firm or a business at the sale of each unit of the product. Contribution margin is used to measure…
Financial Ratios: Figures that keep you informed
Business ratios can be explained as financial tools that can help you in finding the weak and erroneous areas of your business. With the help of these ratios you can…
Price Earnings Ratio (PE Ratio)
Robert Price Earnings Ratio (PE Ratio): Definition: Price earnings ratio (P/E ratio) is the ratio between market price per equity share and earning per share. The ratio is calculated to make an estimate of appreciation…
Gross Profit Ratio (GP Ratio)
Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the relationship between gross profit and sales. Components: The basic components for the calculation of gross profit ratio are gross profit and net sales.Net sales means that sales minus…
Liquid or Liquidity Ratio / Acid Test or Quick Ratio
Liquid or Liquidity Ratio / Acid Test or Quick Ratio: Definition: Liquid ratio is also termed as "Liquidity Ratio", "Acid Test Ratio" or "Quick Ratio". It is the ratio of liquid…
Net Profit Ratio (NP Ratio)
Definition of net profit ratio: Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage. Components of net profit ratio: The two basic…
Accounting Ratios | Financial Ratios
Sana Ahmed Accounting Ratios | Financial Ratios: Learning Objectives: Define and explain the term accounting ratios. What are advantages and limitations of using accounting or financial ratios. How financial ratios are classified.…