Ratio Analysis What is RA What is Ratio

Ratio Analysis {

• What is RA? What is Ratio Analysis? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios Detailed study of ratios

• What is RA? • Why RA? • Classification of Ratios Why Ratio Analysis? ü Simplifies Financial Terms ü Inter-firm Comparison ü Intra-firm Comparison ü Planning And Forecasting • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Classification Of Ratios • What is RA? • Why RA? • Classification of Ratios Traditional Classification Ø • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios Ø Ø Profit and loss account ratios Balance sheet ratios Composite ratios Functional Classification Ø Ø Ø Profitability ratios Turnover ratios Financial ratios

• What is RA? Profitability Ratio • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios These ratios measure the operating efficiency of the firm and its ability to ensure adequate returns to its shareholders

Profitability Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Profitability Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Profitability Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Turnover Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Turnover Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Turnover Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

• What is RA? Financial Ratio • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios It indicates the financial position of the company. Financial position of the company has to be judged from two angles: long-term as well as short-term. Long term requirements of funds should be met out of long term funds and short term requirements should be met out of short term funds.

Financial Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Financial Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Financial Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

Financial Ratio • What is RA? • Why RA? • Classification of Ratios • Profitability ratio • Turnover ratio • Financial ratio • Limitations of accounting ratios

• What is RA? • Why RA? • Classification of Ratios • Profitability ratio Limitations Of Accounting Ratios Comparative study required Ratio alone are adequate • Turnover ratio • Financial ratio • Limitations of accounting ratios Window dressing Problem of price level changes No fixed standards

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