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  3. current assets 3.49 3.24 liquid ratio 2.17 1.93

Current Assets 3.49 3.24 Liquid Ratio 2.17 1.93 GP Ratio 0.65 0.50 NP Ratio 0.47 0.22 AR Rate 3.19 3.64 ROE 0.81 0.38 Debt to Equity 3.12 2.22 Total Asset Turnover 0.42 0.53 ROI 0.20 0.12 Times interest cover 4.80 3.48 EPS 2.19 1.10 Please give interpreations for...

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Question

Accounting

Current Assets3.493.24
Liquid Ratio2.171.93
GP Ratio0.650.50
NP Ratio0.470.22
AR Rate3.193.64
ROE0.810.38
Debt to Equity3.122.22
Total Asset Turnover0.420.53
ROI0.200.12
Times interest cover4.803.48
EPS2.191.10

Please give interpreations for the ratios given !!

Answer & Explanation Solved by verified expert
4.0 Ratings (819 Votes)
Current assets ratio This ratio is a measure of liquidity It indicates whether the business would be able to repay the current liabilities out of current assets within a year Current asset ratio of 349 indicates that we have 349 of current assets to repay 1 of current liabilities As it can be seen that current ratio has been reduced from 349 to 324 which indicates that the current assets have declined Liquid ratio This ratio indicates ability to meet short term liabilities with most liquid assets like cash and it excludes inventories Decline in liquid ratio from 217 to 193 indicates that liquid assets are declining GP ratio It stands for gross profit ratio The formula for calculating gross profit ratio is Gross profit Sales It measures trading    See Answer
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Current Assets3.493.24Liquid Ratio2.171.93GP Ratio0.650.50NP Ratio0.470.22AR Rate3.193.64ROE0.810.38Debt to Equity3.122.22Total Asset Turnover0.420.53ROI0.200.12Times interest cover4.803.48EPS2.191.10Please give interpreations for the ratios given !!

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