Archive | Accounting

Standard of Comparison of Ratios | Accounting

In this article we will discuss about the standard of comparison of ratios and projection of future through ratios. Standard of Comparison: The ratio analysis involves comparison for useful interpretation of the financial statements. Interpretation of financial statements of a firm with the help of ratios becomes significant and meaningful. The ratios should be compared […]

Classification of Combined Ratios | Accounting

In this article we will discuss about the classification of combined ratios in accounting. They are:- 1. Activity Ratios or Turnover Ratios 2. Profit Cover Ratios. 1. Activity Ratios or Turnover Ratios: This category of ratios includes those ratios, which highlight upon the activity and operational efficiency of the business concern. The funds of creditors […]

Profitability Ratios and it’s Categories | Accounting

The profitability of the firm is also measured in relation to investments. The term investment may refer to total assets, capital employed or the owners’ equity. The efficiency of an enterprise is judged by the amount of profits. But sometimes the conclusion drawn on the basis of profit-to- sales ratios may be misleading. Because it […]

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