FINANCIAL RATIOS

The Indian Council of Agricultural Research (ICAR) is a statutory body established in 1946 by the Indian government to co-ordinate and guide agricultural research and education in the country. It is the apex body for agricultural research under the Indian Council of Agricultural Research and Education (ICAR&E). Key Highlights: Major thrust areas: Agroforestry, Agricultural Extension, […]

The accounting equation is fundamental to understanding accounting and financial statements. It is always in the form: Assets = Liabilities + Owner’s Equity Assets: are the resources a company owns that generate revenue. Examples include cash, accounts receivable, inventory, and fixed assets. Liabilities: are the debts or obligations that a company owes to others. Examples […]

The z-score, also known as the standard score, is a standardized score that measures the distance of a data point from the mean in terms of the number of standard deviations from the mean. Here is the formula for calculating z-score: $$z = frac{x – mu}{sigma}$$ where:* z is the z-score* x is the data […]

Sure, here is the definition of profit before tax (PBT): Profit before tax (PBT) is the total amount of revenue generated by a company after subtracting all costs and expenses, but before paying taxes. It is also known as taxable income. Here is the formula for calculating PBT: PBT = Net Income – Taxes where:* […]

Return on Investment (ROI) ROI is a metric used to measure the profitability of an investment or an expenditure. It is calculated by dividing the net return on investment by the cost of investment and multiplying it by 100%. Formula: ROI = (Net Return on Investment / Cost of Investment) x 100% Net Return on […]

Earnings yield is a measure of return on investment used primarily by analysts and investors to understand the relationship between a company’s net income and its market value. It is calculated by dividing the company’s net income by its market capitalization and expressed as a percentage. Formula: Earnings Yield = Net Income/Market Capitalization X 100% […]

EBITDA Margin EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin is a measure of profitability that calculates the percentage of revenue that is generated by operating activities, excluding the effects of interest, taxes, depreciation, and amortization. It is a key metric used by investors and analysts to assess the financial performance of a company. […]

Acid-Test Ratio The acid-test ratio is a measure of current liquidity that measures the ability of a company to meet its current liabilities in full. It is calculated by dividing current assets by current liabilities. Formula: Acid-Test Ratio = Current Assets / Current Liabilities Interpretation: A high acid-test ratio indicates that the company has a […]

Financial Ratios Financial ratios are measures that compare two or more financial items to provide insights into a company’s financial performance and health. They are used by investors, analysts, and creditors to assess a company’s ability to meet its financial obligations, generate cash flow, and create value. Common Financial Ratios: Liquidity Ratios:– Current Ratio- Quick […]

The solvency ratio is a measure of a company’s ability to meet its debt obligations on time. It is calculated by dividing current liabilities by current assets. A solvency ratio of 1 means that the company is able to pay off its current liabilities in full. A solvency ratio greater than 1 means that the […]