Ratio Analysis

Ratio Analysis:

This analysis is the tool of Finance. With ratio analysis, we can verify our financial position and revenue position. It is very obliging to analyze financial statement. It is also simple to understand and elucidate interpretations via such ratios.

Before discussing various ratios, you must understand the meaning of Ratio. Ratio is the relationship among two or more items of balance sheet or gain and loss account or both statements. For knowing short term position’s liquidity or strength, we can find current ratio, liquid ratio. Such ratios tell us what is the quantity of current assets that is in the business when we take the burden of current liabilities. When amount of current assets will be more than amount of current liabilities, then our liquidity position will strong. We can as well compute mixed ratios such as inventory turnover ratio, debtor turnover ratio and creditor turnover ratio.

Such ratios are very obliging to find following period:

1. With inventory turn-over ratio, we can compute inventory conversion period. When this period is too short then it means we contain power to sell our product greatly.

2. With debtor turn-over ratio, we can compute debtor conversion period, when this period is too short then it means that we can transform over credit sale greatly into cash.

3. With creditor turn-over ratio, we can compute creditor conversion period, when this period is short, then it means we are prepared vastly to decrease our current liabilities. This is bonus point when our debtor conversion period will also short. When debtor conversion period is long, then smallness of creditor conversion period is our negative point.

We can examine of profitability by making total profit ratio, net profit ratio, ROI ratio and operating ratio. We can also ensure our long term financial position’s weakness or strength by computing fixed asset and equity ratio, debt-equity ratio, current asset and capital employed ratio.

Latest technology based Finance Online Tutoring Assistance

Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Finance help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Finance, project ideas and tutorials. We provide email based Finance help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Finance. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Finance Homework help and assignment help services. They use their experience, as they have solved thousands of the Finance assignments, which may help you to solve your complex issues of Finance. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.

©TutorsGlobe All rights reserved 2022-2023.