Fabulous Financial Ratio Analysis Formulas Pdf
View ratio-analysis formulaspdf from ACCOUNTING BSA at Notre Dame of Marbel University.
Financial ratio analysis formulas pdf. Accounting Ratios 205 ratio analysis. The formula for Ratio Analysis can be calculated by using the following steps. The Financial Statements Three fi nancial statements are critical to fi nancial statement analysis.
ALTMANS Z-SCORE for Public Limited Company. The balance sheet the income statement and the statement of cash fl ows. Thus the limitations of financial statements also form the limitations of the ratio analysis.
Operating cycle Number of days of inventory I nventory I nventory Average days cost of goods sold Cost of goods sold 365 Number of days of receivables Accounts receivable Accounts receivable Average days sales on credit Sales on. Hence to interpret the ratios the user should be aware of the rules followed in the preparation of financial statements and also their nature and limitations. FINANCIAL STATEMENT ANALYSIS The major objectives of financial statement analysis are.
Business risk operating analysis ratios 5. Financial ratio analysis is conducted to learn more about the accounts and businesses. Calculations vary in practice.
A few points should be noted. These ratios provide an. Again taking the example of Joe Kovers business we can state his current ratio as N16 000 N13 000 1.
The table below shows the calculations of these ratios. Financial ratio analysis compares relationships between financial statement accounts to identify the strengths and weaknesses of a company. This list is not exhaustive.