CASEBOOK

Pro Membership
  • Foundation
  • Advanced
  • Login
Menu
  • Foundation
  • Advanced
  • Login
Search

CASEBOOK

Pro Membership
Search

CASEBOOK

Search
Content
    Introduction to Accounting
    The Story Income Statement Balance Sheet Statement of Cash Flow
    Accounting Principles
    Introduction to Accounting Principles Accounting Principles & Guidelines (contd..) Accounting Principles & Financial Statements
    Accounting Basics
    Double Entry System of Accounting Debits & Credits Bank's Debit & Credit Chart of Accounts
    Financial Statements
    Introduction to Financial Statements Accrual v/s Cash basis of Accounting
    Income Statement
    Income Statement: An Introduction Revenue & Expenses; Gains & Losses Income Statement Formats Operating Income; EBITDA; Net Income; EPS
    Balance Sheet
    Balance Sheet: An Introduction Assets & Liabilities; Stockholders' Equity Relation: Balance Sheet & Income Statement
    Working Capital & Liquidity
    Operating Cycle Working Capital: An Introduction Working Capital v/s Liquidity
    Statement of Cashflow
    Cashflow Statement: An Introduction Preparing Cashflow Statement Preparing Cashflow Statement (Contd ... ) Preparing Cashflow Statement: Summary Relation: Balance Sheet & Cashflow Statement
    Adjusting Entries
    Introduction to Adjusting Entries Accrual Entries Deferral Entries Reversal Entries
    Preparing Financial Statements
    Financial Statements: Quarter 1 Financial Statements: Quarter 2 Financial Statements: Quarter 3 Financial Statements: Quarter 4
    Financial Ratios
    Introduction to Financial Ratios Profitability Ratios Liquidity & Solvency Ratios Activity & Valuation Ratios
    Capital Budgeting
    Need & Business Scenario Net Present Value (NPV) Present Value (PV) of an Annuity Present Value (PV) of a Perpetuity Rate of Return (IRR) & Payback Method
    Case Study Framework
    Introduction to Case Study Frameworks Growth Strategy Merger & Acquisition International Expansion Pricing Strategy

Financial Ratios

INTRODUCTION TO FINANCIAL RATIOS (Contd ...)

This section talks about the Liquidity and Solvency Ratios and their business interpretation in detail. We will be using following income statement & balance sheet for our analysis on financial ratios and will assume a tax rate of 30% wherever applicable –

2. LIQUIDITY RATIOS

Liquidity ratios highlight a company’s health by determining how well it is placed to pay its debt in the short term without raising any external capital. Popular liquidity ratios used by analyst are described below –

3. SOLVENCY RATIOS

Solvency ratios highlight a company’s health by determining how well it is placed to pay its debt in the long term. Popular solvency ratios used by analyst are described below –

Table of Contents : Financial Ratios

Part 3 : Introduction to Financial Ratios: Activity & Valuation Ratios
  • Activity Ratios
    • Inventory turnover ratio
    • Asset turnover ratio
    • Invested capital turnover ratio
    • Equity Turnover ratio
    • Capital asset Intensity ratio
    • Working capital turnover ratio
    • Accounts receivable turnover ratio
    • Days Inventory
    • Days Cash on hand
    • Days receivables (or Collection Period)
    • Days Payable
  • Valuation Ratios
    • Earnings per share (EPS)
    • Price/earnings (P/E) ratio
    • Dividend yield
    • Dividend Payout
Part 2 : Introduction to Financial Ratios: Liquidity & Solvency Ratios (Current Page)
  • Liquidity ratios
    • Current ratio
    • Quick ratio
  • Solvency ratios
    • Debt/Equity ratio
    • Debt/ Capitalization ratio
    • Times Interest Earned
Part 1: Introduction to Financial Ratios: Profitability Ratios
  • Profitability ratios based on Return of Sales
    • Gross margin %
    • Operating margin %
    • Pre-tax margin %
    • Net Profit %
  • Profitability ratios based on Return on Investment
    • Return on Assets (ROA)
    • Return on investment capital (ROIC)
    • Return on equity (ROE)

Foundation section top picks

expert's choice

Standard Costing

Financial accounting

Working Capital & Liquidity

Evaluating business investments

Inventory & Cost of goods sold

Trending Topics

Featured

Accounting Basics

Some of the basic accounting terms that you will learn include revenues, expenses, assets, liabilities, income statement, balance sheet, and statement of cash flows.

Chart of accounts

A chart of accounts is a listing of the names of the accounts that a company has identified and made available for recording transactions in its general ledger.

Trending Topics

Break-even Point

Depreciation

Activity Based Costing

Credits & Debits

Bank Reconciliation

Manufacturing Overheads

Non-manufacturing Overheads

Improving Profits

standard costing

A chart of accounts is a listing of the names of the accounts that a company has identified and made available for recording transactions in its general ledger.

Advanced section top picks

expert's choice

Standard Costing

Financial accounting

Working Capital & Liquidity

Evaluating business investments

Inventory & Cost of goods sold

Trending Topics

Featured

Accounting Basics

Some of the basic accounting terms that you will learn include revenues, expenses, assets, liabilities, income statement, balance sheet, and statement of cash flows.

Chart of accounts

A chart of accounts is a listing of the names of the accounts that a company has identified and made available for recording transactions in its general ledger.

Trending Topics

Break-even Point

Depreciation

Activity Based Costing

Credits & Debits

Bank Reconciliation

Manufacturing Overheads

Non-manufacturing Overheads

Improving Profits

standard costing

A chart of accounts is a listing of the names of the accounts that a company has identified and made available for recording transactions in its general ledger.

GET ACCESS TO CASE PARTNERS, 150+ BUSINESS CASE STUDIES & TUTORIALS, CASE STUDY SCENARIOS & FRAMEWORKS, INDUSTRY ANALYSIS, ARTICLES, MENTAL MATHS TOOLS & MUCH MORE …..

Twitter Facebook-f Dribbble Youtube Pinterest

RESOURCES

  • Business Frameworks
  • Case Library
  • Industry Analysis
  • Mental Maths
  • Puzzles

ABOUT US

  • Privacy Policy
  • Terms
  • Careers
  • Success Stories
  • Contact Us

IMPORTANT LINKS

  • Business Finance
  • Consulting Case Studies
  • Operations Section
  • Business Editorials

© All rights reserved

Made with ❤ by Macboi Productions