The ratio analysis is made under six broad categories as follows: 1. Liquidity Ratios 2. Leverage Ratios 3. Asset Management Ratios 4. Profitability Ratios 5. Operating Ratios 6. Market based Ratios. Category # 1. Liquidity Ratios: The liquidity ratios measure the liquidity of the firm and its ability to meet its maturing short-term obligations. Liquidity is defined as the ability [...]
The below mentioned article provides a format of cash flow statement. Data Required in the Preparation of a Cash Flow Statement: The following basic informations are required for the preparation of a cash flow statement: a. Balance Sheets: Balance sheets at the beginning and at the end of the accounting period indicate the changes that have taken place in assets, [...]
In this article we will discuss about interest cover and income gearing in a company. Interest Cover: This ratio is calculated to analyse the company's ability to meet interest obligations. It is expressed as number of times interest earned. It is measured as a ratio of profit before interest and tax to interest charges. The more the number of times [...]