Ratio Analysis es z Current Ratio Liquidity Ratio ———> bed “—~ Quick Ratio a Debt Equity Ratio TOL/ANW Ratio Interest Coverage Ratio DSCR Return Ratio » Return on Capital Employed al on Asset ® Return on Faouitw “ Leverage Ratio ——— Solvency Ratio ———>Liquidity Ratios oe These ratios carry great importar analysis, especially in the context Af examination of a proposal for = working capital credit rn tase wernt’ capital ee are treated as shortterm credit requirements and a banker needs to examine whether the loan is. likely to be repaid on ee if fi YB tries possivie oniy ir the rent assets)are iguid enough and whether th .eds of thé currenasSets are adequate to repay the dues of the bank on demand. Liquidity ratios therefore indicate an relationship between current assets and current liabilities of an enterprise. illLiquidity Ratios 3» Liquidity ratio are of two types i, Current Ratio: It indicates Short terin liquidity of a firm and is widely used by credit analysts. a Current Ratio = cient Keaetae Current Liabilities