Articles: 1,432 · Readers: 748,000 · Views: 2,231,258 Quick Ratio (Acid-Test Ratio) is ratio between the most liquid assets and Current Liabilities. It deals with the firm’s most liquid assets.
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Current Ratio is ratio between Current Assets and Current Liabilities. It compares Current Assets with Current Liabilities of the business.
Return on Capital Employed (ROCE) is ratio between Net Profit Before Interest and TAX, and Capital Employed - Share Capital plus Retained Profit.
Return on Equity (ROE) is ratio between Net Profit Before Interest and TAX. and Equity. It compares Net Profit Before Interest and TAX with Equity.
The Motivation Curve allows us to see a big picture to visualize where our motivation is at the certain moment in life. There will be highs and lows.
Net Profit Margin (NPM) is one of the profitability ratios between Net Profit Before Interest and TAX, and Sales Revenue. Check more details.
Gross Profit Margin (GPM) is ratio between Gross Profit and Sales Revenue. It compares Gross Profit with Sales Revenue.
Internal Users and External Users of Final Accounts will find Ratio Analysis of great help when making business decisions.
Each stakeholder group will want to know different information about a business, therefore will analyze Final Accounts differently.
After a brief introduction to five different types of ratios in the last article, let’s take a look at those accounting ratios with more details.
Different types of ratios are used to analyze information from Profit and Loss Account (P&L Account) and Balance Sheet to judge financial performance.
Ratio Analysis helps to compare business performance using historical comparisons and using current comparisons between different companies.
Ratio Analysis is a quantitative management tool used for analyzing the financial performance of a business organization.
Accountants need to develop the knowledge and skills of amending Final Accounts such as Profit and Loss Account (P&L Account) and Balance Sheet.
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There is a number of different methods accountants can use to calculate depreciation of Fixed Assets in Balance Sheet. Straight-Line Method. Reducing Balance Method.