RATIO ANALYSIS

 

RATIO ANALYSIS

It is a report which is used by management of company to know status of company or whole performance of company.

Some important ratios are as follow:

    1)    Current ratio:- it shows the ratio between current assets and current liabilities.

Current ratio = current assets/current liabilities

    2)    Quick ratio:- it is the good indicator of liquidity.

Quick ratio = current assets – stock in hand/ current liability

    3)    Gross profit ratio:- by using this ratio a businessman can find out earning capacity of his business.

Gross profit ratio = gross profit * 100/ net sales

    4)    Net profit ratio:- by using this ratio a businessman can find out net profit of his company.

Net profit = net profit * 100/ net sales

Create ledger and voucher entries and then to view the report of ratio analysis follow the path:

To view ratio analysis:- G.O.T.(gateway of tally) --> ratio analysis.