Accounts

Gaining Ratio and Sacrificing Ratio – Difference

Description Gaining Ratio Sacrificing Ratio Formula for calculation New profit Sharing Ratio Less Old Profit Sharing ratio Old profit sharing Ratio Less New profit Sharing Ratio When calculated a) Retirement of a Partner b) Change in profit sharing ratio among existing partners a) Admission of a partner b) Change in profit sharing ratio among existing …

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Admission of a Partner – Adjustments Required

Five types of adjustments are required on the admission of a new partner in a partnership firm The above five types of adjustments are common for every type of reconstitution of partnership firm which includes: Thus the above said 5 types of adjustments will be done in each case of reconstitution of partnership firm

Debt Equity Ratio

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. A Story to understand meaning of Debt Equity Ratio Once upon a time, there was a young girl named Alice who loved to …

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Solvency Ratios

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 …

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