The lower this ratio, the better it is for long-term lenders because they are more secure in that case. A comparison of this ratio with that of similar firms will throw light on the relative profitability and strength of the firm.
Successful companies generally have solid ratios in all areas, and any Project on ratio analysis of weakness in one area may spark a significant sell-off in the stock. For example, companies in sectors such as utilities typically have a high debt-equity ratio, but a similar ratio for a technology company may be regarded as unsustainably high.
Certain ratios are closely scrutinized because of their relevance to a certain sector, as for instance inventory turnover for the retail sector and days sales outstanding DSOs for technology companies. Out of these profits is retained in the business and the remaining is distributed among equity shareholders as dividend.
Examples of solvency ratios include debt-equity ratio, debt-assets ratio, and interest coverage ratio. Payment of interest may become difficult if profit is reduced.
In a business where stock turnover ratio is high, goods can be sold at a low margin of profit and even than the profitability may be quit high.
A high working capital turnover ratio shows efficient use of working capital and quick turnover of current assets like stock and debtors. No ideal standard is fixed for this ratio, but the gross profit ratio should be adequate enough not only to cover the operating expenses but also to provide for deprecation, interest on loans, dividends and creation of reserves.
Remember this if your project or account manager starts staying that too much detail sounds negative. A higher debt collection period is thus, an indicates of the inefficiency and negligency on the part of management.
Generally, debt equity ratio of is considered safe. The higher ratio indicates the better liquidity position, the firm will be able to pay its current liabilities more easily. High level description of what is being done - just a couple of paragraphs.
This ratio is used to measure whether the market price of a share is high or low. Non-functional requirements - another area where loads of stuff gets missed. This will indicate the long-term financial Project on ratio analysis of business.
Interfaces to other systems - In my experience one the things which adds complexity to any project is things over which you do not have complete control, and one of the key areas this happens is interfaces to other systems.
Hence, specific expenses ratio are computed by dividing each type of expense with the net sales to analyse the causes of variation in each type of expense. A low working capital turnover ratio indicates under-utilisation of working capital.
These ratio may be calculated into two categories: A couple of paragraphs at most. Investors use these ratios to determine what they may receive in earnings from their investments and to predict what the trend of a stock will be in the future. If there is a fall in this ratio, it will show that fixed assets have not been used as efficiently, as they had been used in the previous year.
Quick Ratio or Acid Test Ratio a. Profit margin, return on assets, return on equity, return on capital employed, and gross margin ratio are examples of profitability ratios. Whereas, Return on shareholders funds measures only the profitability of the funds invested by shareholders.Ratio analysis project 1.
1 CHAPTER-I INTRODUCTION 2. 2 RATIO ANANLYSIS Introduction The ratio analysis is the most powerful tool of financial analysis.
Project on ratio analysis in "PIDILITE INDUSTRIES LTD ". Ratio Analysis: Ratio analysis is the process of determining and presenting the relationship of items and group of items in the statements.
According to Batty J. Management Accounting “Ratio can assist management in its basic functions of forecasting, planning coordination, control and communication”.
Project Report On Ratio Analysis - Free download as Word Doc .doc) or read online for free/5(37). a project report on financial performance evaluation with key ratios at vasavadatta cement kesoram industries ltd sedam mi-centre.com How to write a project Analysis or project brief? Does anyone know of an example technical analysis or extensive project brief that i can take a look at in order to better put the stuff i've read to practice?
I'm a big fan of learn-by-example, no need to say that:).Download