Ratios

Ratios Formula Expressed Remarks

Expressed as Indicates the efficiency in

Total Assets Turnover Ratio Net Sales / Avergae Total Assets No. of Times utilisation of Total Assets

Total Assets = Fixed Assets + Long Term Investments + Current Assets

Net Sales = Gross Sales - Sales Return - Excise Duty

Expressed as Indicates the efficiency in

Fixed Assets Turnover Ratio Net Sales / Average Net Fixed Assets No. of Times utilisation of Fixed Assets

Indicates the number of

times earnings are
Profit before Interest and Tax (EBIT) / Interest Expressed as sufficient to pay interest
Interest Coverage Ratio Expenses No. of Times on borrowingss

Indicates the number of

(NPAT (Net Profit after Tax) + Depreciation + times earnings are
Interest) / (Interest + Loan Principal Expressed as sufficient to repay the
Debt Service Coverage Ratio Repayment) No. of Times Loan Installments

Amount Available to Equity Shareholders :

(NPAT - Preference Dividend if any) / Indicates the Earnings
Earnings per Share (EPS) Outstanding No.of Equity Shares Rs. per Share available per equity share

Indicates the Dividend per

Amount Available as Equity Dividend: (Equity Rs. per Share equity share
Dividend per Share (DPS) Dividend) / Outstanding No.of Equity Shares
OR
EPS * Payout Ratio

Equity Dividend * 100 / Profit available to

Dividend Payout Ratio Equity Shareholders Indicates the percentage
OR of earnings actually
Pure Ratio or distributed as Equity
DPS * 100/ EPS Percentage Dividend

Profit before Interest and Tax *100 / Capital Indicates the Returns on
Return on Capital Employed Employed or Average Total Assets Percentage Total Capital Employed

Dividend yield measures

how much cash flow one
Percentage is getting for every rupee
invested in an equity
Dividend Yield DPS * 100 / MPS position
 Dividend yield measures
how much cash flow one
Percentage is getting for every rupee
invested in an equity
position

(where MPS = Market Price per Share)

Indicates the number of

times the EPS is covered
Price Earnings Ratio (P/E Ratio) Market price per Share / Earnings Per Share No. of times by its market price.

Financial leverage is the

leverage effect on
Pure Ratio or account of the financial
Financial Leverage PBIT/PBT Percentage cost, interest

Operating leverage is
the leverage effect on
Pure Ratio or account of all fixed
Operating Leverage Contribution / PBIT Percentage costs other than interest

Pure Ratio or
Combined leverage Contribution / PBT Percentage