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# Accounting Ratios Formulas:

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 Gross profit ratio =  (Gross profit / Net sales) x 100 Net profit ratio =  (Net profit / Net sales) x l00 Operating profit ratio = (Operating profit / Net sales) x 100 Expense ratios = (Individual expenses / Net sates) x 100 Operating (cost) ratio =  (Operating cost / Net sales) x 100 Net profit to net worth ratio = (Net profit after interest and tax / Net worth) x 100 Return on capital employed (ROI) = (Net profit before interest, tax / Capital employed) x 100 Earning per share = net profit available for equity shareholders / Number of equity shares Dividends per share = Dividend amount / Number of equity shares Capital employed turnover ratio = Cost of sales / Capital employed Fixed assets turnover ratio = Cost of sales or sales / Fixed assets Working capital turnover ratio = Cost of sales or Net sales / Net working capital Inventory turnover ratio = Cost of goods sold / Average inventory Debtors (receivables) turnover ratio = Annual net credit sales / Average accounts receivable Debtors (receivables) collection period = Accounts receivables / Net credit sales per day Creditors turnover ratio = Net credit purchases / Average creditors Average credit period = Average account payables / Net credit purchases per day Current ratio = Current assets / Current liabilities Quick ratio/Acid test ratio = Quick assets / Current liabilities Debt Equity Ratio = Total long term debts / shareholder' funds Debt to net worth = Total long term debt / Shareholder's funds External-internal equity = External equity / Internal equity Debt vs. funds = total long term debts / Total long term funds Debt service ratio = Earnings before interest and taxes / Fixed interest charges Fixed assets ratio =Net fixed assets / Long-term funds Solvency (debt to total funds) ratio = Total liabilities / Total assets Reserves to capital ratio = Reserves / Capital Capital gearing ratio =Equity / Fixed interest hearing securities Proprietary ratio = Proprietor's funds / Total assets
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## More study material from this topic:

 Meanings, Nature and Usefulness of Ratios Analysis Interpretation of Ratios Important Factors for Understanding Ratios Analysis Significance and Usefulness Ratios Analysis Classification of Ratios Analysis of Short Term Financial Position or Test of Liquidity Current Ratio Quick/Acid Test/Liquid Ratio Absolute Liquid Ratio Inventory/Stock Turnover Ratio Debtors / Receivable Turnover Ratio Creditors / Payables Turnover Ratio Working Capital Turnover Ratio Profitability Ratios Gross Profit Ratio (GP Ratio) Operating Profit Ratio Net profit ratio (NP ratio) Earnings Per Share Ratio Operating ratio Expense ratio Solvency ratios - Test of Long Term Solvency Debt-equity Ratio Debt Service Ratio or Interest Coverage Ratio Fixed Assets Ratio Debts to Total Funds or Solvency Ratio Reserves to Capital Ratio Capital Gearing Ratio Proprietary Ratio Accounting Ratios Formulas Limitations of Ratios Analysis

A D V E R T I S E M E N T

 Financial Accounting Topics Introduction to Accounting ---------------------------------------------------------------------------- Transactions and Accounting Equation ---------------------------------------------------------------------------- Analysis of Business Transactions ---------------------------------------------------------------------------- Journal, Ledger and Trial Balance ---------------------------------------------------------------------------- Accounting for Bills of Exchange ---------------------------------------------------------------------------- Special Journals ---------------------------------------------------------------------------- Cash Book ---------------------------------------------------------------------------- Bank Reconciliation Statement ---------------------------------------------------------------------------- Final Accounts ---------------------------------------------------------------------------- Work Sheet ---------------------------------------------------------------------------- Capital and Revenue Items ---------------------------------------------------------------------------- Valuation of Inventories ---------------------------------------------------------------------------- Accounts of Non-profit Making Organizations ---------------------------------------------------------------------------- Statement of Cash Flows ---------------------------------------------------------------------------- Accounting Ratios Analysis ---------------------------------------------------------------------------- Depreciation, Provisions and Reserves ---------------------------------------------------------------------------- Accounting Dictionary ---------------------------------------------------------------------------- Financial Calculators

 Managerial Accounting Topics Financial Statements ---------------------------------------------------------------------------- Cost Volume Profit Relationship ---------------------------------------------------------------------------- Variable Costing System ---------------------------------------------------------------------------- Materials and Inventory Cost Control ---------------------------------------------------------------------------- Activity Based Costing System ---------------------------------------------------------------------------- Standard Costing and Variance Analysis ---------------------------------------------------------------------------- Balanced Scorecard ---------------------------------------------------------------------------- Capital Investment Analysis/Capital Budgeting

A D V E R T I S E M E N T