1. Ratio analysis

2. 1) CURRANT RATIO
C.R= CURRANT ASSET / CURReNT LIABILITIES
C.A=CASH, BANK, STOCK, DEBTORS, BILLS RECEIVABLE
PREPAID EXPENSES, MARKET INVESTMENT, SHORT
TERM LOAN (GIVEN)
C.L=O/S EXPENCES, BILLS PAYABLE, CREDITORS, SHORT
TERM LOAN (RECEIVE), BANK OVERDRAFT,
PROVISION FOR TAX , PROPOSE DIVIDENT

3. 2) QUICK OR LIQUID RATIO
Q.R= LIQUID ASSETS / LIQUID LIABILITIES
Liquid assets = current assets –stock – prepaid
exp
Liquid LIABILITIES = current LIABILITIES - bank
overdraft

4. 3) Net working capital ratio
n.w.c.r = net working capital / total
assets
Net working capital = current assets –
current liabilities
Total assets = fixed assets + investment +
current assets

5. 4) Gross profit ratio
g.p.r = gross profit / net sales × 100
g.P = sales – cost of goods sold
Net sales = gross sale – sale
return

6. 5) Net profit ratio
n.p.r = net profit after tax / net
sales × 100

7. 6) Operating profit margin
o.p.m = operating net profit / net
sales × 100
o.n.p = gross profit + operating inc
- operating exp

8. 7) Operating ratio
o.R = cogs +operating exp / sales ×100
Operating exp = office & administrative exp
+ selling & distribution + finance
exp
Cogs = op. stock + net purchases + direct wages
+ direct materials + other factory exp –
closing stock

9. 8) Return on capital employed
r.o.c.e = net operating profit /
capital employed × 100
Capital employed = equity capital +
pref. capital +
borrowed fund –
fictions assets

10. 9) Return on equity shareholders
r.o.e.s = n.p.a.t – pref. dividend /
shareholders fund
Shareholders fund = equity capital+
general reserve+
reserve fund -
fictitious assets

11. 10) Return on investment
r.o.i = n.p.a. interest & tax /
shareholders fund × 100

12. 11) Earning per share
e.p.s = n.p.a.t – pref. dividend / no. of
equity share