Current ratio analysis interpretation

    • Current Ratio Definition

      ratio analysis It refers to the systematic use of ratios to interpret the financial statements in terms of the operating performance and financial position of a firm. It involves comparison for a meaningful interpretation of the financial statements.

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    • [DOCX File]Unit 4: Ratio analysis

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      Current Ratio Current Assets/Current Liabilities ( Current assets available to pay current obligations ( Must be aware of A/R and inventory quality; if either is poor, this measure can be misleading. Calculated as of a given date, one day later ratio may change drastically. Interpretation: This ratio is a rough indication of a firm’s ability ...

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    • [DOCX File]WordPress.com

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      Particulars current assets current liabilities net working capital current ratio 2007-2008 1007.38 741.62 265.76 1.35 2008-2009 909.8 711.65 198.15 1.27 2009-2010 1042.86 755.16 287.7 1.38 2010-2011 874.88 743.99 130.89 1.17 Interpretation: Current Ratio means current assets divided by current liability.

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    • [DOC File]CHAPTER 1: INTRODUCTION

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      Ratio analysis will be found useful in this regard. Ratio analysis has become the most widely used and powerful tool of financial analysis. The importance of ratio analysis is so much that sometimes ratio analysis is regarded as a synonym to the financial analysis. 4.2 meaning of ratio and ratio analysis. The term, ‘ratio’, refers to the ...

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    • [DOC File]Examples of Questions on Ratio Analysis

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      Current Ratio Quick Ratio Total Asset Turnover Ratio Inventory Turnover Ratio Receivable Turnover Ratio Debt Ratio Debt-Equity Ratio Equity Multiplier Interest Coverage Profit Margin Return on Assets Return on Equity 0 0 0 0 0 0 0 0 0 0 2.5000000000000001E-2 0.115 With Sustainable Growth Rate (9.08%) Current Ratio Quick Ratio Total Asset ...

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    • [DOC File]Student lecture notes - Pearson Education

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      Current Ratio. Determining the solvency of the firm. Acid Test Ratio. b) Capitalization Ratio/ Leverage Ratio ... Proper interpretation of financial indicators beyond mere ratio analysis helps in getting deeper insight into the affairs of a unit which is …

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    • [DOC File]Example Financial Ratios

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      Ratio analysis. Interpretation of the ratio analysis. Formal calculations are only the start. Ratios must be interpreted. Overview. ... Current ratio Current assets : Current liabilities Acid test (Current assets minus stock) : Current liabilities Stock holding period ( 365

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    • [DOC File]RATIO ANALYSIS - ICSI

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      Quick and Dirty Interpretation of the Financial Ratios. Liquidity Ratios. 1. Current Ratio = Current Assets/Current Liabilities. Example: A current ratio of 3.0: For every dollar of current liabilities, the company has $3 of current assets. General Rule: The greater the current ratio, the better—financially stronger.

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    • [DOCX File]Indian Institute of Banking & Finance (IIBF)

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      Price-earnings ratio. Cash coverage ratio. Return on Assets. 2. Firm A has a Return on Equity (ROE) equal to 24%, while firm B has an ROE of 15% during the same year. Both firms have a total debt ratio (D/V) equal to 0.8. Firm A has an asset turnover ratio of 0.9, while firm B has an asset turnover ratio equal to 0.4. From this we know that

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