Friday, 29 October 2010

Useful ratios - debt and profit

Debt ratios

Current ratio = Current assets / Current liabilities

*Look for current ratio close to the industry average

Quick ratio = (Current asset - Inventory) / Current liabilities


Profit ratio

Gross margin ratio (indicates efficiency at making profit) = Gross profit / Net sales

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...