Archive | Accounting

Limitations of Ratio Analysis | Accounting

Some of the limitations of the ratio analysis are:- 1. Differences in Definitions 2. Limitations of Accounting Records 3. Lack of Proper Standards 4. No Allowances for Price Level Changes 5. Changes in Accounting Procedure 6. Qualitative Factors are Ignored 7. Limited Use of Single Ratio 8. Background is Overlooked 9. Limited Use 10. Personal […]

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 […]

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