List or Classification of ratios | Grouped | Contents

| November 27, 2015 | Management Accounting | No Comments

The ratios are classified on various basics. Such grouped ratios are presented below. Here the list or classification of various financial ratios are grouped under various topics. The contents of individual ratios are also listed out.

Various classification of Ratios

Ratios are classified on the basis of financial statements, users, common, importance, accounting significance, nature and purpose. They are listed as follows.

Ratios on the basis of Financial Statements

  1. Profit and Loss Account Ratios.
  2. Balance Sheet Ratios.
  3. Composite or Mixed Ratios or Inter-statement Ratios.

Ratios on the basis of Users

  1. Ratios for Management.
  2. Ratios for Shareholders.
  3. Ratios for Creditors.

Ratios on the Basis of Common

  1. Profitability ratios.
  2. Turnover Ratios (Activity or Efficiency Ratios).
  3. Liquidity Ratios / Solvency Ratios
  4. Leverage Ratios /Capital Structure Ratios

Ratios on the basis of Importance

  1. Primary Ratios
  2. Secondary Ratios – Supporting & Explanatory
  3. Secondary Credit Ratios
  4. Growth Ratios

Ratios on the basis of Accounting Significance

  1. Solvency Ratios.
  2. Earning Ratios.
  3. Capitalization Ratios.
  4. Credit Ratios.
  5. Management Ratios.

Ratios on the basis of Nature

  1. Inventory Ratios
  2. Debtors and Creditors Ratios
  3. Sales Ratios
  4. Earnings and Dividend Ratios
  5. Cost Ratios

Ratios on the basis of Purpose

  1. Profitability Ratios.
  2. Activity Ratios or Turnover Ratios
  3. Ratios to Judge the Financial Position or Financial Ratios.
  4. Miscellaneous Ratios.

So far, group of ratios are discussed. Now, the contents of each group of ratios are listed below.

Content of each group of ratios

Balance Sheet Ratios (or) Position Statement Ratios

  1. Current Ratio.
  2. Liquidity Ratio (Acid Test Ratio or Quick Ratio).
  3. Proprietary Ratio.
  4. Debt Equity Ratio.
  5. Fixed Assets Ratio.
  6. Capital Gearing Ratio.
  7. Absolute Liquidity Ratio.
  8. Assets Proprietary Ratio.
  9. Capital Inventory to Working Capital Ratio.
  10. Ratio of Current Assets to Fixed Assets Ratio.

Profit and Loss Account Ratios or Revenue / Income Statement Ratios

  1. Gross Profit Ratio.
  2. Net Profit Ratio.
  3. Operating Ratio.
  4. Operating Profit Ratio.
  5. Expense Ratio – Cost of Goods Sold, Administrative Expenses, Selling Expenses and Operating Expenses Ratio.
  6. Interest Coverage Ratio.
  7. Profit cover of Interest and Dividend Ratio.

Mixed Ratios or Composite Ratios or Inter Statement Ratios

  1. Return on Capital Employed.
  2. Return on Shareholders’ Fund.
  3. Stock Turnover Ratio – Raw materials Turnover, Work in Progress Turnover and Finished goods Stock Turnover Ratio.
  4. Debtors Turnover Ratio.
  5. Creditors Turnover Ratio.
  6. Working Capital Turnover Ratio.
  7. Current Assets Turnover Ratio.
  8. Total Turnover or Total Capital Turnover Ratio.
  9. Fixed Assets Turnover Ratio.
  10. Net Sales to Tangible Assets.
  11. Payable Turnover Ratio.
  12. Return on Equity.
  13. Capital Turnover Ratio.
  14. Return on Total Resources Ratio.
  15. Total Assets Turnover Ratio.
  16. Earning per Share.

Ratios for Management

  1. Operating Ratio.
  2. Return on Investment.
  3. Stock Turnover Ratio – Raw Material Turnover, Work in Progress Turnover and Finished Goods Stock Turnover Ratio.
  4. Debtors Turnover Ratio.
  5. Debt Equity Ratio.
  6. Fixed Assets Turnover Ratio.
  7. Creditors Turnover Ratio.
  8. Net Profit Ratio.
  9. Gross Profit Ratio.
  10. Working Capital Turnover Ratio.
  11. Short Term Liquidity Ratio.
  12. Long Term Liquidity Ratio.

Ratios for Creditors

  1. Current Ratio.
  2. Short Term Solvency Ratios.
  3. Debt Equity Ratio.
  4. Creditors Turnover Ratio.
  5. Fixed Assets Ratio.
  6. Assets Coverage Ratio.
  7. Interest Coverage Ratio.
  8. Debt Service Ratio.

Ratios for Shareholders

  1. Return on Shareholders’ Fund Ratio.
  2. Payout Ratio.
  3. Capital Gearing Ratio.
  4. Dividends Cover Ratio.
  5. Dividend Yield Ratio.
  6. Dividend Rate.
  7. Assets Cover of Share.

Short Term Solvency Ratios

  1. Current Ratio.
  2. Liquid Ratio (Acid Test or Quick Ratio)
  3. Absolute Liquid or Cash Ratio.
  4. Internal Measure.
  5. Debtors Turnover Ratio.
  6. Creditors Turnover Ratio.
  7. Inventory Turnover Ratio.

Long Term Solvency Ratios

  1. Debt Equity Ratio.
  2. Debt to Total Capital Ratio.
  3. Interest Coverage Ratio.
  4. Cash flow/Debt.
  5. Capital Gearing Ratio.

Activity Ratios or Turnover Ratios

  1. Debtors Turnover Ratio.
  2. Fixed Assets Turnover Ratio.
  3. Total Assets Turnover Ratio.
  4. Current Assets Turnover Ratio.
  5. Debt Collection Period.
  6. Creditors Turnover Ratio.
  7. Payable Turnover Ratio.
  8. Credit Payment Period.
  9. Capital Employed Turnover Ratio.
  10. Working Capital Turnover Ratio.
  11. Stock Turnover Ratio – Raw materials Turnover, Work in Progress Turnover and Finished Goods Stock Turnover Ratio.

Leverage Ratios

  1. Debt Equity Ratios – Debt to Total Capital, Debt to Total Assets, Proprietary and Capital Gearing Ratio.
  2. Coverage Ratios – Interest Coverage, Dividend Coverage and Debt Service Ratios.

Profitability Ratios Based on Investments

  1. Return on Capital Employed Ratio.
  2. Return on Shareholders’ Equity.
  3. Return on Equity Fund.
  4. Return on Total Assets.
  5. Earning per Share.
  6. Dividend per Share.
  7. Earnings Yield.
  8. Dividend Yield.
  9. Price Earning Ratios.
  10. Dividend Payout Ratio.
  11. Book Value per Share.

Profitability Ratios Based on Sales

  1. Gross Profit Ratio.
  2. Net Profit Ratio.
  3. Operating Profit Ratio.
  4. Expense Ratio – Cost of Goods Sold, Administrative Expenses, Selling Expenses, Operating Expenses and Operating Ratio.
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