1 Gross Profit Ratio Gross Profit /Sales*100 2 Net Profit 3 Operation Ratio (A) (B) (C)

NP/Sales*100 ( NP is = As per Profit & Loss A/c Minus from Abnormal Profit or Plus from Abn Cost of Good Sold+Operating Exp./Sales*100 Cost of Good Sold = Sales Minus(-) GP GP= Op.stock +Purchase+Purcahse Exp. Minus ( - ) Cl. Stock. Oprating Exp = Admin Exp.+Selling & Distri. Exp.+Depriciation

Note : All the Above three Ration is Also Called as Profitability Ratio.

4 Liquidity Ratio (A)

Current Ratio =Current Asset/Current Liabilities*100 Current Asset = Cash, Bank Balance,Stock, Debtors,Bills Receivable,Prepaid Exp. Current Liabilities=Creditord, Bills Payable, Provision for Tax,Bank Overdraft, Out sanding Exp Liquidity Ratio = Current Assest ( CA Minus (-) CL. Stock/Liquid Liabilities( CL Minus Bank ( Quick Ratio )

(B)

5 Solvency ( Long Term Ratio ) (A)

Debt Equity Ratio = Total Debts/ Capital ( Owners Fund )*100 Total Debts equal to Long Term Liabilities Plus Current Liabilities Owners Fund equal to Eq. Sahre Capital+Pref. Sahre Capital+Res. & Surplus Minus Mis Exp.N Long Term Debt Equity Ratio =Long Term Liabilities/Owners Fund *100

(B)

6 Total Assests To Debt Equity Ratio =Total Real Assests /Debts Total Real Assests =Total Assests Minus (-) Prelimnary Exp. Debts ( Long Term Liability) = Debenture Plus,Fixed Deposit Expected. 7 Proprietory Ratio = Owners Fund/Total Real Assests*100 Note : Proprietory ratio based on Equity share holders fund =eq.share holders fund*100 / Total Real Assests In this Above equation Pref. Sahre holder is Not included.

8 Activity Ratio (A)

Stock Turn Over =Net Sales ( Cost of Good Sold )/Av. Stock Av. Stock = Op. Stock Minus Cl.stock/2

9 Debtors Ratio (A) (B) (C)

Debtors Turn Over =Net Annual Credit Sales/Debtors+Bills Receivable Collection Period =Nof Of Days in a Year ( 365 )/Debtors Turn Over

Debtors Ratio = Debtors +Bills Receivable/Av. Daily Credit Sales*No of Days in a Year.(365 o Average Daily Credit Sales = Credit Sales/days in a Year 365

10 Creditors Ratio (A) (B) (C)

Creditors Turnover = Net Annual Purchase/Creditors+Bills Payable. Collection Period = Nof of Days in a year/Creditors Turn over Creditors Ratio =Creditors + Bills Payable/Credit Purchase ( Average Credit Purchase )

11 Working Capital Turnover Working Capital( NWC ) =Current Assests -Current Liabilities (A) (B) (C) (D) Based on NWC ( Net Working Capital ) =Sales /NWC Based On Gross NWC =Sales/ Gross NWC ( Total Current Assests )

Raw Material Storage Period = Av. Stock of Raw Material ( Op. Stock of Raw Material +Cl. Sto Note : Av. Daily consumption of Raw Material = Annual Consumption/360

(E)

Working Progress Conversion Period =Av. Stock Work in Progress/Av. Daily Cost of Productio Note : Av. Daily Cost of Production =Annual Cost of Production/360

(F)

Annual Cost of Production = Op. Stock Work in Progress+Consumption of Raw Material+other Fuel,Depriciation Minus (-) Cl.stock of Work in Progress Finished Goods Storage Period =Av. Stock of Fin. Goods/Av. Stock daily cost of Sales Note : Daily cost of Sales =annual cost of Sales/360

(G)

Annual Cost of Sales =Op.stock of Fin. Goods+ Cost of Production+Excise duty+selling & Dist

rmal Profit or Plus from Abnormal Loss

e,Prepaid Exp. k Overdraft, Out sanding Exp., Statutory Liabilities.

Liabilities( CL Minus Bank OD )*100

& Surplus Minus Mis Exp.Not Write off.

0 / Total Real Assests

No of Days in a Year.(365 or 360 )

ge Credit Purchase )

ock of Raw Material +Cl. Stock/Av.daily consumption of raw material

Av. Daily Cost of Production

ption of Raw Material+other Mfg. exp. Sucj as Wages, Power,

daily cost of Sales

+Excise duty+selling & Dist.exp.+Admin Exp.+Financial Cost-Cl.stock. Fin Goods

Financial Statement of BPL Ltd. Profit & Loss A/c 31st March 2012. Particulars Amount To Op. Stock 1600000 To Purchase 2840000 To GP 3360000 Total To Admin Exp. To In On Car Loan To Tax To Net Profit Total 7800000 1360000 180000 910000 910000 3360000

Particulars By Sales By Cl. Stock

Amount 6000000 1800000

2 7800000 3 By Gross Profit 3360000

Total

3360000

Balance Sheet as on 31st March 2012. Liabilities Sahre Capital Rs.40,000 eq. sahre of Rs.100 Each Genearal Reserve P & L A/c 10% Debenture Bank Overdraft Creditors Other Current Liabities Amount Assests Amount 5

4000000

700000 1000000 1800000 50000 420000 130000

Fixed Assests Stock Debtors Bills Receivable Cash Prepaid Insurance Fictitous Assests

4900000 1800000 800000 50000 250000 200000 100000

Total

8100000

Total

8100000 8

Notes : 1. Credit Sales During the YearRs.29,20,000/2. Credit Purchase During the Year Rs.21,90,0000/-

9 Note : Madam In Your P& L a/c GP is 3360000 but Am Calculate Actual GP is 48 Lacs

10

11

GP Ratio=

0.8 80 % 0.391667 39.16667 % 1200000 1360000 6000000 0.426667 42.66667 Cost of Good Sold Op. Exp Sales ( Cost of Good Sold +Op Exp./ Sales ) %

Net Profit Ratio

Opearting Ratio

Stock Turn over -740000 Current Ratio

8.108108 Days

3100000 CA 2400000 CL 1.291667 % 129.1667 1300000 ( CA- Cl. Stock ) 2350000 ( CL-Bank OD ) 0.553191 % 55.31915 850000 8000 365 106.25 38781.25 ( Debtors +Bills Receivable ) ( Av. Daily Credit Sales ) ( Days In Year 365 ) OK OK

Liquid Ratio

Debtors Ratio

Creditros Ratio

420000 ( Creditors +Bills Payable ) 6000 ( Av. Daily Credit Purchase ) 70 OK

Working Capital TurnOver 3100000 2400000 700000 1.291667 8.571429 CA CL NWC ( CA-CL ) % ( Sales /NWC )

Actual Based on NWC

Based ON Gross NWC

1.935484 ( Sales /Total CA ( Gross NWC )

Proprietory Ratio

4E+08 ( Eq. Sha. Owner Fund *100 6740000 Total Real Assests ( Total Assests Minus Prelimnay Exp. ( Admin Exp. 59.34718 % 2400000 ( Total Debts ) 4100000 ( Total Out Side Liabilities ) 0.585366 58.53659 %

Debts Equity Ratio ( Based of TOL )

. ( Admin Exp.