Archive | Financial Management

Financial Ratio Formulas | Accounting

Here is a list of some important financial ratio formulas. 1. Current Ratio = Current Assets/Current Liabilities 2. Net Working Capital Ratio = Net Working Capital/Net Assets 3. Quick Ratio = Quick Assets/Liquid Liabilities 4. Cash Position Ratio = (Cash + Marketable Securities)/ Liquid Liabilities 5. Proprietary Ratio = Shareholders’ Fund/ Total Asset (or) Total […]

Classification of Ratios | Accounting

In this article we will discuss about the classification of ratios in accounting. The accounting ratios may be classified on the following bases leading to somewhat overlapping categories: (A) Classification by Statements: The Traditional classification is based on those statements from which information is obtained for calculating the ratios. The ratios are classified as follows: […]

Limitations of Financial Statements | India | Accounting

In this article we will discuss about the limitations of financial statements of a company. Financial statements are based on historical costs and as such the impact of price level changes is completely ignored. They are interim reports. The basic nature of financial statements is historic. These statements are neither complete nor exact. They reflects […]

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