There are some other important ratios used to conduct the valuation of a company. These valuation ratios are mainly used to compare a company’s current valuation or market price with other companies operating into the same sector or industry or with the industry average. The main objective of this comparison is to find out whether […]Continue Reading... No Comments.
Company pays back some part of the profit to the equity shareholders in terms of the dividends. After paying the dividend, company keeps the remaining profit as retained earnings to invest in business or future expansion. Earnings per Share (EPS) denote the earnings or net income generated per common outstanding shares. This calculates the net […]Continue Reading... No Comments.
Activity ratios are related to the daily operations of a company which are used to analyze the efficiency of the company and the management to generate cash faster from the business operations. During its daily business operations the company Buy the raw materials and inventories from the suppliers and pay them cash for the same. […]Continue Reading... No Comments.
Solvency refers to the company’s ability to meet all of its obligations and to pay all of its liabilities when they are due to be paid. Solvency ratios are used to check the solvency condition of a company which mainly checks for the amount of debt taken and the cash spent on interest of the […]Continue Reading... No Comments.
Profitability ratios indicate the profit related performance of a company where it considers gross profit, net profit, operating profit etc. to calculate the profitability ratios. The profit margin denotes the percentage of profit generated for each amount of sales volume. It means how much the company is earning in cash from each sales volume and […]Continue Reading... No Comments.