1.

Current Ratio Ability to repay

short-term commitments promptly. High Ratio indicates existence of idle

current assets. Current ratio shows the short-term financial position of the business. This ratio measures the ability of the business to pay its current liabilities. The ideal current ratio is supposed to be 2:1. 2. 3. 4. 5. 6. Quick Ratio or Acid test ratio Ability to meet immediate liabilities. Ideal Ratio is 1.33:1 Absolute Cash Ratio - Availability of cash to meet short- term commitments. Debt Equity Ratio - Indicates the relationship between debt & equity; Ideal ratio is 2:1. Proprietary Ratio - Shows extent of owner's funds utilized in financing assets. Interest Coverage Ratio - Indicates ability to meet interest obligations of the current year. Should generally be greater than 1. 7. 8. Fixed Asset Turnover Ratio - Ability to generate sales per rupees of Fixed Asset Stock/Inventory Turnover Ratio - Indicates how fast inventory is used / sold. A high turnover ratio generally indicates fast moving material while low ratio may mean dead or excessive stock. 9. Debtors Turnover Ratio - Indicates speed of collection of credit sales.

10. Creditors Turnover Ratio - Indicates velocity of debt payment. 11. Total Assets turnover ratio - Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue - the higher the number the better. 12. Capital Turnover Ratio - Capital turnover ratio establishes a relationship between net sales and capital employed. The ratio indicates the times by which the capital employed is used to generate sales. he objective of capital turnover ratio is to calculate how efficiently the capital invested in the business is being used and how many times the capital is turned into sales. Higher the ratio, better the efficiency of utilization of capital and it would lead to higher profitability. 13. Gross Profit Ratio - The gross profit ratio tells us how the company's gross profits relate to their sales. Different industries have fundamentally different gross profit ratios. 14. Net Profit Ratio - NP ratio is used to measure the overall profitability and hence it is very useful to proprietors. The ratio is very useful as if the net profit is not sufficient, the firm shall not be able to achieve a satisfactory return on its investment. 15. Operating Ratio - This ratio is a test of the efficiency of the management in their business operation. It is a means of operating efficiency. In normal conditions, the operating ratio should be low enough so as to leave portion of the sales sufficient to give a fair return to the investors. 16. Return on Equity - The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. 17. Debt-To-Capital Ratio - A measurement of a company's financial leverage, calculated as the company's debt divided by its total capital. Debt includes all short-term and long-term obligations. Total capital includes the company's debt and shareholders' equity, which includes common stock, preferred stock, minority interest and net debt. 18. Capital Gearing Ratio - Shows proportion of fixed charge (dividend or interest) bearing capital to equity funds; the extent of advantage or leverage enjoyed by equity shareholders. 19. Expense ratios - indicate the relationship of various expenses to net sales. 20. The operating ratio reveals the average total variations in expenses. 21. ROI - A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. 22. Earnings Per Share - Return or income per share, whether or not distributed as dividends. 23. PE ratio - A valuation ratio of a company's current share price compared to its per-share earnings. 24.