Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

Which accounting ratio gives the perfect financial position of business. Pls write the ratio formula?

user-image
Question added by Fazal Qayyum , PURCHASING OFFICER , Ali & Sons Contracting Co. Sole Proprietorship LLC
Date Posted: 2014/08/15
VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Liquidity Ratios, Solvency Ratios,  Profitability Ratios,   Effieciency Ratios.....these determine the Perfect Financial Position of a business.

1.Crrent Ratio: Current Assets / Current Liabilities  (main Liquidity Ratio) 

-- explains  the company's short term liquidity position. 

2. Debt-Equity Ratio   (main Solvency Ratio)

    = Total of Companies External Debts/  Total Equity and Capital Reservess

--Explain the capability of company to perform its long term obligations 

3. P/V Ratio:  Gross Profit/ Net Sales ( main Profitability Ratio)

--Explains how well the company is Erning profits surpassing its BEP

4. Inventory Ratio: Cost of Goods Sold / Average Inventory  (Main Efficiency Ratio)

--Explains--how well the Current Assets are utilised with lesser holding period

(All Ratios can be expressed by way of percentage)

georgei assi
by georgei assi , مدير حسابات , المجموعة السورية

Assets + expenses + Partners withdrawals = liabilities + equity + revenue

FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

I think all the important financial ratios to determine the financial position and financial ratios are divided into four main sections, namely: 

1. liquidity ratios 

2. profitability ratios 

3. efficiency ratios 

4. leverage ratios

Menerva Melad
by Menerva Melad , Account Executive, Key Accounts , Graphic Home Company

.Crrent Ratio: Current Assets / Current Liabilities  (main Liquidity Ratio)  -- explains  the company's short term liquidity position

More Questions Like This

Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.