What is ROI (Return on Investment)? What is ROA (Return on Asset)? How to calculate ROI(Return on Investment)? How to calculate ROA (Return on Asset)?

Return on Investment (ROI) also known as Return on assets (ROA). This is a profitability ratio that helps determine how efficiently a company uses its assets. It is calculated divided to PAT (Profit after Tax) by Total Asset. In other words, ROA or ROI is an efficiency metric explaining how efficiently and effectively a company […]

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What is Working Capital Turnover Ratio? How to calculate Working Capital Turnover Ratio?

Working Capital Turnover Ratio is used to determine the relationship between net sales (Total Sale – Sale Return) and working capital of a business. It shows the number of net sales generated for every single unit of working capital employed in the business. Gross Working Capital = Total Current Asset Net Working capital is calculated

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What is Capital Gearing Ratio? How to calculate capital gearing ratio?

Capital gearing ratio is a useful tool to analyze the capital structure of a company or business and is computed by dividing the common stockholders’ funds by fixed cost bearing funds. Analyzing capital structure means measuring the relationship between the funds provided by common stockholders and the funds provided by those who receive a periodic

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What is the Proprietary Ratio? How to calculate proprietary Ratio?

Proprietary ratio shows the total assets of a company which are financed by proprietors’ funds. This ratio is also known as equity ratio. It helps to determine the financial strength of a company & is useful for creditors to assess the ratio of shareholders’ funds employed out of total assets of the company. Proprietors’ funds

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What is a Fixed Asset Ratio? How to Calculate fixed asset ratio?

Fixed asset ratio shows the relationship between a company’s long term funds with Fixed asset. Fixed Assets ratio is a type of solvency ratio which is calculated by dividing total fixed assets (net of depreciation) of a company with its long-term funds. It shows the amount of fixed assets being financed by long term funds.

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What is Debt to asset ratio? How to calculate debt to asset ratio?

Debt to asset ratio shows the relationship between a company’s total debt with total asset. The debt to asset ratio measures the percentage of total assets financed. It is computed by dividing the total debt of a company with its total assets. It shows the amount of debt obligation a company has for each unit

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What is Debt to equity ratio? How to Calculate Debt to equity ratio?

Debt to equity ratio shows the relationship between a company’s total debt with Shareholders Funds. If the purpose of calculating debt to equity ratio is to examine financial solvency of a firm in terms of its ability to avoid financial risk. Formula of Debt to equity ratio? Debt to Equity Ratio = Debt/Equity (Shareholder Funds)

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What is Stock Turnover Ratio (Inventory turnover ratio) How to calculate stock turnover ratio (Inventory turnover ratio)? What is Stock (Inventory) holding days? How to calculate stock (Inventory) holding days?

Inventory turnover ratio or stock turnover ratio indicates the relationship between COGS (Cost of Goods Sold) and Average Stock (Inventory). It indicates how efficiently the company investment in inventories is converted to sales. Stock Turnover Ratio is an activity and efficiency ratio. This ratio helps to determine stock related issues such as overstocking and overvaluation.

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What is Debtor Turnover Ratio? How to calculate debtor turnover ratio ? What is Average Receivable days? How to Calculate average Receivable Days?

Debtor’s turnover ratio is also known as the Trade Receivables Ratio. It is an activity ratio that finds out the relationship between sales and average debtors of the company. It helps in cash planning as cash flow from customers can be computed on the basis of total sales generated by the company. Provision for doubtful

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What is the Creditor Turnover ratio? How to calculate Creditor Turnover Ratio? What is the average payment days? How to calculate the average payment day?

The creditor’s turnover ratio is also known as the Payables Turnover Ratio. It is useful for knowing about company payment policy. It is an activity ratio that finds out the relationship between purchases and creditor of a business. It also useful in find out how efficiently the funds are employed by a firm and indicates

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