Category: Financial Ratio Analysis

Cash ratio defines the relationship of cash, cash equivalents and current liabilities. its formula is Cash + Cash Equivalents / Current Liabilities

Quick ratio is in fact a strict calculation of an entity’s ability to settle its short-term liabilities. It also known as Acid Test Ratio. Its formula is Cash + Securities + Receivable / Current Liabilities

Current ratio measures the liquidity level of an entity. It indicates the ability of the entity to pay its current debts (current liabilities) out of its current assets. This is also called ‘the working capital ratio’. Short term creditors are Read More …

Definition Earnings Per Share (EPS) which is also called ‘Net Income Per Share is an accounting ratio computed usually at the end of the financial year on the basis of profit earned. This ratio is market prospect and computes profitability levels Read More …

Definition Financial ratio analysis is the result of dividing one financial statement item by another is financial item. Ratios help financial analysts to interpret financial statements by focusing on specific relations. In more simple words a ratio is nothing more Read More …