Which accounting ratio gives the perfect financial position of business. Pls write the ratio formula?

Question

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN · Answer

Liquidity Ratios, Solvency Ratios, Profitability Ratios, Effieciency Ratios.....these determine the Perfect Financial Position of a business.

1.Crrent Ratio: Current Assets / Current Liabilities (main Liquidity Ratio)

-- explains the company's short term liquidity position.

2. Debt-Equity Ratio (main Solvency Ratio)

= Total of Companies External Debts/ Total Equity and Capital Reservess

--Explain the capability of company to perform its long term obligations

3. P/V Ratio: Gross Profit/ Net Sales ( main Profitability Ratio)

--Explains how well the company is Erning profits surpassing its BEP

4. Inventory Ratio: Cost of Goods Sold / Average Inventory (Main Efficiency Ratio)

--Explains--how well the Current Assets are utilised with lesser holding period

(All Ratios can be expressed by way of percentage)

georgei assi · Answer

Assets + expenses + Partners withdrawals = liabilities + equity + revenue

FITAH MOHAMED · Answer

I think all the important financial ratios to determine the financial position and financial ratios are divided into four main sections, namely:

1. liquidity ratios

2. profitability ratios

3. efficiency ratios

4. leverage ratios

Menerva Melad · Answer

.Crrent Ratio: Current Assets / Current Liabilities (main Liquidity Ratio) -- explains the company's short term liquidity position