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    5 Remaining Ratios

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    hariharanp
    The document discusses various financial ratios used to analyze business performance and investments including return on investment, return on equity, fixed asset turnover ratio, total debt to total assets ratio, inventory turnover ratio, and dividend payout ratio. Formulas for calculating each ratio are provided along with example graphs showing ratio values for a company from 2018 to 2022.

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    5 Remaining Ratios

    Uploaded by

    hariharanp
    21 views2 pages
    The document discusses various financial ratios used to analyze business performance and investments including return on investment, return on equity, fixed asset turnover ratio, total debt to total assets ratio, inventory turnover ratio, and dividend payout ratio. Formulas for calculating each ratio are provided along with example graphs showing ratio values for a company from 2018 to 2022.

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    5 remaining ratios

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    The document discusses various financial ratios used to analyze business performance and investments including return on investment, return on equity, fixed asset turnover ratio, total debt to total assets ratio, inventory turnover ratio, and dividend payout ratio. Formulas for calculating each ratio are provided along with example graphs showing ratio values for a company from 2018 to 2022.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    21 views2 pages

    5 Remaining Ratios

    Uploaded by

    hariharanp
    The document discusses various financial ratios used to analyze business performance and investments including return on investment, return on equity, fixed asset turnover ratio, total debt to total assets ratio, inventory turnover ratio, and dividend payout ratio. Formulas for calculating each ratio are provided along with example graphs showing ratio values for a company from 2018 to 2022.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    RETURN ON INVESTMENT:

    Return on investment (ROI) is the key measure of the profit derived from any investment. It is a ratio that
    compares the gain or loss from an investment relative to its cost. It is useful in evaluating the current or
    potential return on investment, whether you are evaluating your stock portfolio's performance, considering a
    business investment, or deciding whether to undertake a new project. ROI is the most important factor
    businesses look at when investing

    Formula:

    Return on Equity = Net Profit/cost of investment x 100


    Profit = Current Value – Cost of investment.

    Interpretation: The above graph shows the Return on Equity of the company for the year 2018 to 2022. In
    the year 2018, the Return-on-Equity ratio is 18.71 and declined in 2019. It hits 2.18 in the year 2022.

    the year 2022.

    FIXED ASSET TURNOVER RATIO:


    Fixed asset turnover ratios are indicators of how efficiently a company does sales from assets. The turnover
    ratio is calculated by dividing net sales and the average balance of fixed assets. A higher ratio means
    management is using its fixed assets more effectively.

    Formula:

    Fixed Assets Turnover Ratio = Net Sales/ Average Fixed Assets

    Interpretation: In the above graph shows the Fixed Assets Turnover Ratio of the company from the year
    2018 to 2022. In the year 2018 the fixed assets turnover ratio is 17.65 and decreases in the year 2019 at
    13.62, also decreases to 10.71 at the year 2020. In the year 2022 the fixed assets turnover hits 10.66.

    TOTAL DEBT TO TOTAL ASSET RATIO:


    In business, the debt-to-total assets ratio is a measure to gauge the ability of a company to raise cash from
    new debt. A comparison with another company in the same industry is part of the evaluation. The higher the
    debt-to-total assets ratio, the more likely a company is to be leveraged

    Formula:

    Total Debt to Total Assets Ratio = Total Debts/Total Assets


    Interpretation: The above graph shows the data regarding the “Total Debt to

    Total Assets ratio” for the year 2018 to 2022. In the year 2018 the Total debt and total

    assets Ratio is 0.65 and increases in the next year in 2019 at 0.68. And, the ratio declines

    0.66 at the year 2022.

    INVENTORY TURNOVER RATIO:


    Inventory turnover, a type of financial ratio, shows how frequently a company's inventory was sold relative
    to its cost of goods sold over a given time frame. The average number of days it takes for a company to sell
    its inventory can then be calculated by multiplying the number of days in the period by the inventory
    turnover ratio

    Formula:

    Inventory Turnover Ratio = Net Sales / Average Inventory at Selling Price.

    Interpretation: In the above graph shows the inventory turnover ratio of the company from the year 2018 to
    2022. In the year 2018 the trade receivables ratio was 11.58 and the highest is in the year 2019 for 13.95 and
    hits 11.45 in the year 2022.

    DIVIDEND PAYOUT RATIO:


    A company's dividend payout ratio - which shows how much of its earnings after tax are paid to
    shareholders - has been calculated. The ratio is calculated by dividing dividends paid by earnings before tax
    by the number of shares held by the company's shareholders
    Formula:

    Dividend Pay-out Ratio = Dividend/Net income * 100

    Interpretation: In the above graph shows the dividend pay-out ratio of the company. In the year 2018, the
    dividend pay-out ratio is 36,16, it hits highest in 2020 by 179.59 and decreases in 2021 by 23.92, then hits
    167.83 in 2022.

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