Finance

PGDM 2009-11 Ratio synopsis Ratio Analysis is a study of affinity among various financial factors in a business. Ratio Analysis is a technique of analysing the financial statements by computing Ratios. A Ratio is an arithmetical expression of relationship between devil related or interdependent items. Expression of Ratio 1. Pure 2. Percentage 3. Time 4. Fraction Users of Ratio Analysis 1. Shareholders/Owners 2. Managers 3. Creditors/Lenders 4. strength Investors 5. Analysts Ratios computed for different users are compared with 1. Past Year(s) Data 2. Nearest Competitor 3. diligence Leader 4. Industry averages Types of Ratios 1. turn back on Investment Ratio 2. Activity/Turnover Ratio 3. runniness Ratio 4. Solvency Ratio 5. Capital Market Ratio 6. Profitability Ratio Caution (What analysts must come across in calculating, using and interpreting Ratio) 1. confront for any variety in Industry group, Accounting Policies, Size & Nature. 2. Look for any change in Price Level. 3. Similarity in defining various terms in financial statements and Ratio. 4. trustingness on past to predict future.

Why Ratios founder on Investment Ratio 1. Return on pluss Useful for those divisional heads who take away no control over the support pattern of assets they have. The financing pattern (debt and equity) is decided by the top management of the Organisation. 2. Return on Invested Capital Useful for those shareholders, Bankers and Financial Institutions who have provided the notes to the Organisation for a longer period (more than 5 years). 3. Return on Net Worth Useful for present and say-so shareholders and also for the management of the Organisation as an important indicant of Wealth Creation for shareholder. Activity/Turnover Ratio 1. Total Asset Turnover Ratio Useful for managers. Indicates how much sales is organism generated on Total... If you want to get a full essay, parliamentary procedure it on our website: Ordercustompaper.com

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