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Accounting Ratio 12th Commerce

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12 views2 pages

Accounting Ratio 12th Commerce

Uploaded by

achal.allure
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ALLURE EDUCATION POINT PH NO.

:- 7599412557 , 7310664878
COACHING For Bank, B.B.A., B.COM ., IX to XII (Science ,Maths, Commerce) for CBSE board
ALLURE EDUCATION POINT ALLURE EDUCATION POINT ALLURE EDUCATION POINT ALLURE EDUCATION POINT
ALLUREedEDUCATION POINT

1. Current Ratio: Current Assets / Current liability.

2. Quick ratio: Current Assets- Inventory-Prepaid / Current Liability.

3. Debt-Equity Ratio: Debt / Equity.

4. Total Assets to Debt ratio: Total Assets / Debt.

5. Proprietary Ratio: Equity / Total Assets.

6. Interest Coverage Ratio: Earning before interest and tax / Interest on long term debt.

7. Trade Receivable Turnover Ratio: Net Credit Sales / Average Receivables.

8. Average Receivable Period: 365/ Trade Receivable Turnover Ratio.

9. Trade Payables Turnover Ratio: Net Credit Purchase / Average Payables.

10. Average Payable Period: 365/ Trade Payable Turnover Ratio.

11. Inventory Turnover Ratio: Cost of Goods Sold / Average Inventory.

12. Working Capital Turnover Ratio: Net Annual Sales / Working Capital.

13. Gross Profit Ratio: Gross Profit / Net Sales * 100.

14. Net Profit Ratio: Net Profit / Net Sales * 100.

15. Operating Profit Ratio: Operating Profit / Net Sales * 100.

16. Operating Ratio: Operating Cost / Net Sales * 100.

17. Return on Investment: Earning Before Interest and Tax / Average Capital Employed.

Key Notes to Remember


 Current Assets = T/R + C&C Equivalent + S.T. Inv. + S.T. loans & advances + Inventory + OCA
 Current Liability = S.T. Borrowing + S.T. Provision + Trade Payables + OCL

By: AMAN SHARMA


ALLURE EDUCATION POINT PH NO.:- 7599412557 , 7310664878
COACHING For Bank, B.B.A., B.COM ., IX to XII (Science ,Maths, Commerce) for CBSE board
ALLURE EDUCATION POINT ALLURE EDUCATION POINT ALLURE EDUCATION POINT ALLURE EDUCATION POINT
ALLUREedEDUCATION POINT

 Debt. = L.T. Borrowing + L.T. Provisions + Debentures + Other Non-Current Liabilities


 Equity = SHF (Share Capital + Reserve & Surplus)
 Total Assets = Non-Current Assets + Current Assets
 Total Liability = Total Assets SHF + Non-Current Liability + Current Liability
 Total Debt = Non-Current Liability + Current Liability
 Net Credit sales = Total Sales – Sales Return – Cash Sales
 Net Credit purchase = Total Purchase – Purchase Return – Cash Purchase
 Average Receivables = Opening (Debtors + B.R.) + Closing (Debtors + B.R.) / 2
 Average Payables = Opening (Creditors + B.P.) + Closing (Creditors + B.P.) / 2
 COGS = [Opening Stock + Net Purchase + Direct Expenses – Closing Stock]

[Sales – Gross Profit]


 Average Inventory = Opening Inv. + Closing Inv. / 2
 Net Annual Sales = Sales – Sales Return
 Working Capital = Current Assets – Current Liabilities
 Average W.C. = Opening WC + Closing WC / 2
 Gross profit = Sales – COGS
 Net Profit = Gross Profit – all other expenses + all other incomes
 Operating Expenses = Incurred in ordinary course of business e.g. salaries, bad debts, dep. Etc.
 Operating Incomes = Received in ordinary course of business e.g. Sales, commission, Etc.
 Non-Operating Expenses = Loss by fire, loss on sale of assets, interest expenses, Etc.
 Non-Operating Incomes = Rent Received, Interest received, Dividend received, gain on sale of
assets, Etc.
 Operating Profit = [Net profit + Non-Operating Expenses – Non-Operating Incomes]

[Gross Profit + Operating Incomes – Operating Expenses]


 Operating Cost = COGS + Operating Expenses
 Capital Employed = Share Holder’s Fund + Long Term Debt (Excl: Long Term Provisions)

By: AMAN SHARMA

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