Sl.

No Particulars Working Ratio Ideal

1 Current ratio Current Asset/ Current Liability
4630/980 4.72 2:1

Current Asset
Cash and Cash equivalent 230
Trade receivable 1900
Inventory 1000
portfolio Investment <12 months 1500
Total 4630

Current Liability
Trade payble 250
Interst Payble 230
Income Tax payble 400
Short term Borrowing < 12 months 100
Total Current Liability 980
Financial position of the Company from Solvency Point of View
2 Liquid ratio Liquid assets/ Current Liability
3630/980 3.70 1:1
Liquid assets
Cash and Cash equivalent 230
Trade receivable 1900
portfolio Investment <12 months 1500
3630
Ready available of cash in the form of liquid assets at least 100% of current Liability
3 Debt Equity Ratio Total Borrowing/ Total Equity
2300/4730 0.49 2:1
Borrowing/ Debt
Long Term debts > 12 months 2200
Short term Borrowing < 12 months 100
Total borrowing 2300
Total Equity 4730
Relative proportion of outsiders fund and share holders fund invested in the Company
4 Return on Capital Employed PAT/Capital Employed
2140/6930X100 (%) 30.88
Cap Employed= Total Assets- Current Liability
7910-980 6930
Profit After Tax 2140
Earning Capacity of the Capital employed in the business
5 Net Profit Margin Net profit after Tax (PAT)/Net Saes
2140/30650X100 (%) 6.98
Over all profitability of the concern

6 Inventory Turnover Ratio Cost of goods sold/ Average Inventory

28960/1475 19.63
Opening Inventory 1950
Closing Inventory 1000
2950
Average Inventory 1475
Cost of Goods sold 28960
Number of times finished stock is turned over during a given accounting period
7 Debtors Turnover Ratio Average Debtors/ Credit SalesX Nof days in a period
3100/12260X365 (days) 92.29
Opening Trade Receivable 1200
Closing Trade recivable 1900
3100
Average debtors 1550
Credit Sales 40% of Total sale
40% of 30650 12260

Accounts receivable in number of days of credit sales during a period.

8 Earning Per Share PAT/ No of Equity Share
2140 lakh/1500000 Shares 142.67
Company's profit per share i.e return per equity share
9 Price earning Ratio Market Price per share/ Earning per share
250/142.67 1.75
What is the market value of every rupee earned, in order to know whether market price of shares are
under valued
10 Dividend Payout ratio Dividend Per share/ Earning per share
20/142.67 X100 (%) 14.02
What proportion of earning per share has been used paying dividend and what has been retained for
ploughing back
Dividend per share = Rs.20 Per share
Face value of share Rs.100
11 Dividend yield Ratio Dividend per share/ Market price per shareX100
20/250X100 (%) 8
Return on investment by share holder at Market Price
12 Working Capital Turnover Ratio Sales/ Net working Capital
30650/(4630-980) 8.40
The Number of times the working Capital is turned over during a period of time
13 Absolute Liquid ratio Cash & bank+hort term markatable securities/ Current liability
230+100/630 0.52 1:2
cash availability to meet urgent payble settlement
14 Inventory to working Capital Ratio Inventory/ Working Capital
1000/(4630-980) 0.27 1:1
Inventory as a part of working Capital to avod over stocking
15 Debt Service Ratio EBIT/Interst on borrowing
2440+400/400 X100 710
Whether Business can earn sufficient profit to pay interst on borrowings ( Lenders perspective)
16 Propritery Ratio Shareholders fund/ Total Assets
7910/4730 1.67 1:3
Relationship between shareholders fund to total asset
17 Fixed assets to Capital Employed ratio Fixed Assets/ Capital Employed
Cap Employed=Total Assets-Current Liability
2280/(7910-980) 0.33
Part of Capital employed has been used in purchase of Fixed assets of the Company