Financial Ratios for Company Health

Today we are taking information of Various kind of Ratios bankers ,finance teams considering while knowing health and status of your company .Surely this is very much informative and you will love this additional information in your store 

Profitability Ratios 

1. Return On Sales :- Net Income / Revenue 
2. Return On Assets ( ROA) :- Net Income/ Total Assets 
3. Return On Equity ( ROE) :- Net Income/ Owners Equity 
4. Gross Profit Margin :- Gross Profit/ Revenue 
5.EBIT :- Operating Profit / Revenue 

This all ratios helpful for company owner or director while running companies 

Efficiency Ratios 

1. Asset Turnover :- Revenue / Total Assets 
This ratio should be always  higher

2. Days sales Outstanding :- Account Receivable / Revenue per Day 

This ratio decided how long it takes company to collect what it owned 

3. Days Payble Outstanding :- Amount Payable / Cost of goods sold per day 

Ratio decided how much company takes to pay suppliers .

4. Inventory Days :- Average Inventory / Cost of goods sold per day 


Liquidity Ratios. 

1. Current Ratio ( Bankers Ratio) :- Current Assets / Current Liability. 

This ratio is helpful for checking up financial health of company while decided loan  

If you have any questions please feel free to comment here .

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