Ratio Analysis Seminar and PPT with PDF Report: Ratio analysis is a strong instrument in the financial analysis. In the financial analysis, a ratio is used as a benchmark for the evaluation of the financial status and performance of an industry. The financial relationship is defined as the relationship between two accounting figures which are expressed mathematically and in the simple words; the financial ratio is also called as the ratio. This article Ratio Analysis Seminar PDF Report and PPT is completely free to download.

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Ratio Analysis Seminar PDF Report and PPT

Standards of Comparison:

A single ratio does not show the favorable conditions or else the unfavorable conditions itself and it needs to be compared with few standard ratios and the standard of comparison may have the following:

  • Past ratios
  • Competitor’s ratios
  • Industry ratios
  • Protected ratios

Theoretical Background:

The theoretical background of ratio analysis consists of the following:

  • The avail and significance of the ratio analysis
  • Limitations
  • Classification of ratios
  1. The avail and significance of ratio analysis: The avail and significance of ratio analysis consist of the following:
  • Managerial uses of ratio analysis
  • Utility to shareholders/ investors
  • Utility to employees
  • Utility to government
  • Tax audit requirements
  1. Managerial uses of ratio analysis: The managerial uses of ratio analysis are again classified and they help with the following parameters:
  • Aids in decision making
  • Aids in financial forecasting and planning
  • Aids in communicating
  • Aids in co-ordination
  • Aids in control
  1. Limitations: The main or important limitations of the ratio analysis are as below:
  • False results
  • Limited comparability
  • Absence of standard universally accepted terminology
  • Changes in the price level affect the ratios
  • Ignoring qualitative factors
  • Personal bias
  • Window dressing
  • Absolute figure distortive
  1. Classification of ratios: Now, coming to the classification of ratios, there are four vital categories of ratios and they are as below:
  • Liquidity ratios
  • Leverage ratios
  • Profitability ratios
  • Activity ratios
  1. Liquidity ratios: The function of the liquidity ratios is to measure the ability of the firm and to meet the present obligations. Some of the common ratios that come under the liquidity ratios are as follows:
  • Current ratio
  • Quick ratio
  • Cash ratio
  • Network capital ratio
  1. Leverage ratios: The leverage ratios are the long-term financial strength and they indicate the proportions of debt and equity in financing the firm’s assets. Few ratios that come under leverage ratios are as below:
    • Debt ratio
    • Debt-equity ratio
    • Capital employed in the net worth ratio
    • Coverage ratio
  2. Profitability ratios: The profitability ratios have the strength of long-term earning and they measure the overall performance of the industry along with the effectiveness of the industry. Two important types of profitability ratios are as follows:
    • Profitability in relation to sales
    • Profitability in relation to investment
    • Some of the profitability ratios are as follows:
    • Net profit margin
    • Net margin based NOPAT
    • Operating expense ratio
    • Return on investment
    • Return on equity
    • Earnings per share
    • Dividends per share
    • Dividend payout rule
  3. Activity ratios: The activity ratios reflect the efficiency of the industry in making use of the industry’s assets. Few activity ratios are as follows:
    • Inventory turnover ratio
    • Inventory conversion period
    • Debtors’ turnover ratio
    • Average collection period
    • Net assets turnover ratio
    • Current assets turnover
    • Total assets turnover
    • Fixed assets turnover
    • Working capital turnover ratio

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Types of Ratios:

Normally the types of ratios are classified based upon the short-term solvency and long-term solvency.

Short Term Solvency:

The ratios in the short term solvency are as follows:

  • Current ratio
  • Liquid ratio
  • Absolute liquid ratio
  • Cash ratio
  • Cash burn ratio

Long Term Solvency:

The ratios in the long term solvency are as follows:

  • Long term debt to equity
  • Total debt to equity
  • Total debt to total capital ratio
  • Fixed assets to equity capital ratio
  • Net tangible assets to long debt
  • Financial leverage
  • Interest coverage
  • Cash interest coverage
  • Debt service coverage
  • Cash flow adequacy

Content of the Seminar and pdf report for Ratio Analysis

  • Introduction
  • Types of Ratio
    • Short Term Solvency
    • Long Term Solvency
  • Terms
  • ROI Ratios
  • Liquidity Ratios
  • Efficiency Ratios
  • Profitability Ratios
  • Valuation Ratios
  • Reference

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Ratio Analysis PPT and Seminar Free Download

Ratio Analysis pdf Report Free Download

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