 FOLLOWING ARE THE PROFITABILITY RATIOS WHICH

INDICATES PROFITABILITY OF THE COMPANY.

1) G.P RATIO = G.P/SALES *100

2) OPERATING PROFIT RATIO = OPERATING PROFIT OR E.B.I.T / SALES

*100

3) N.P RATIO = N.P OR P.A.T/SALES *100

4) RETURN ON CAPITAL EMPLOYED =

E.B.I.T OR OPERATING PROFIT / CAPITAL EMPLOYED * 100

5) RETURN ON SHARE HOLDERS FUND =

P.A.T / SHARE HOLDERS FUND * 100

6) RETURN ON EQ.SHARE HOLDERS FUND =

P.A.T – PREFERENCE SHARE DIVIDEND / EQ SHARE HOLDERS

FUND *100

7) RETURN ON TOTAL ASSETS =

P.A.T / TOTAL SALES *100

 FOLLOWING ARE THE LIQUID RATIO WHICH INDICATES THE

LIQUIDITY THAT IS CAPACITY TO PAY LIABILITIES OF THE CO.

8) CURRENT RATIO = CURRENT ASSETS / CURRENT

LIABILTIES

 THE IDEAL CURRENT RATIO IS 2 : 1

9) LIQIUD RATIO / QUICK RATIO / ACID TEST RATIO =

LIQUID ASSETS / LIQUID LIABILITIES

 THE IDEAL LIQUID RATIO IS 1 : 1

  FOLLOWING ARE THE COVERAGE RATIO WHICH INDICATES THE
CAPACITY TO PAY RETURN ON THE INVESTMENT OF THE
COMPANY.

10) INTREST COVERAGE RATIO = E.B.I.T / INTREST

11) PREFRENCE DIVIDEND COVERAGE RATIO =

P.A.T / PREFRENCE DIVIDEND

12) FIXED CHARGE COVERAGE RATIO = E.B.I.T / INTREST +

PREF.DIVIDEND

13) DEBT SERVICE COVERAGE RATIO =

P.A.T + INTREST + NON CASH EXP. / INTREST +

INSTALMENTS

 FOLLOWRING ARE THE CAPITAL STRUCTURE RATIO WHICH

GIVES IDEA REGARDING THE RISK FACTOR

14) DEBT EQUITY RATIO = DEBT / EQUITY

15) PROPRITARY FUND RATIO = PROPRITARY FUND / TOTAL ASSETS

*100

16) CAPITAL GEARING RATIO = DEBT + PREF.SH CAP / EQ. SH HOLDERS FUND

 FOLLOWING ARE THE TURNOVER RATIO WHICH ARE KNOWN AS

EFFECIANCY RATIOS.THESE RATIOS INDICATES EFFICIANCY OF THE
COMPANY.THEY ARE THE MOST IMPORATANT RATIOS FROM ALL OF THE
RATIOS GIVEN AS IT TARGETS THE EFFICIANCY LEVEL OF THE COMPANY.

17) FIXED ASSETS RATIO = SALES / FIXED ASSETS

18) TOTAL ASSETS TURNOVER RATIO = SALES / TOTAL ASSETS

19) CAPITAL TURNOVER RATIO = SALES / CAPITAL EMPLOYED

20) WORKING CAPITAL TURNOVER RATIO = SALES / WORKING CAPITAL

21) STOCK TURNOVER RATIO = C.O.G.S OR SALES / AVERAGE STOCK

22) RAW MATERIAL TURNOVER RATIO =

MATERIAL CONSUMED / AVERAGE STOCK OF RAW MATERIAL

23) DEBTOR’S TURNOVER RATIO = CREDIT SALES / DEBTORS + BILLS

RECEIVABLE

24) CREDITOR’S TURNOVER RATIO =

CREDIT PURCHASE / CREDITORS + BILLS PAYABLE