Once upon a time, there was a young entrepreneur named Kiara who had just started her own business. She was determined to make her business a success, but she also knew that she would need to be smart about managing her finances. One day, Kiara heard about the concept of debt equity ratio. She learned […]

The debt-to-equity ratio is a financial ratio that measures the amount of a company’s debt relative to its equity. It is calculated by dividing the company’s total debt by its total equity. Formula Debt / Equity, where Debt – It covers all long term or non-current liabilities of the company Equity – It covers shareholders’

MEANING Solvency ratios are financial ratios that measure a company’s ability to meet its long-term financial obligations. These ratios are used to evaluate a company’s financial stability and its ability to survive over the long term. Suppose I take a loan of Rs 1 crores from bank to purchase a house. From that money, I

MEANING AND FORMULA It is also known as liquid ratio or acid test ratio it is a measure of a company’s short-term liquidity. The Formula for calculating quick ratio is Quick Assets / Current Liabilities Quick Assets = Current Assets – Inventory – Prepaid Expenses For meaning of current assets and current liabilities please refer

There are many different types of accounting ratios, including: What are Short term funds and Long term funds Before discussing different types of ratios, first we need to understand the difference between short term funds and long-term funds. Suppose you take a big amount housing loan from bank and purchase a house. Does having a

What are Ratios A ratio is a mathematical expression that represents the relationship between two quantities or values. It is typically expressed as a fraction, with the numerator representing the first quantity and the denominator representing the second quantity What are Accounting Ratios Accounting ratios are statistical measures that are used to evaluate the financial

Liquidity Ratios S No Ratio Name Formula 1 Current Ratio Current Assets / Current Liabilities Note : Stores and spares and Loose tools are to be excluded from inventoriesNote : Prov for bad Debts will be deducted from Sundry Debtors 2 Quick Ratio Quick Assets / Current Liabilities where Quick Assets Current Assets – Inventories