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Ratio Analysis Formula Excel Template

The document provides financial information for XYZ Limited for 2021 to calculate various ratios to analyze the company's liquidity, solvency, efficiency, and profitability. Ratios calculated include the current ratio, quick ratio, cash ratio, proprietary ratio, debt-equity ratio, debt ratio, interest coverage ratio, receivables turnover ratio, inventory turnover ratio, payable turnover ratio, asset turnover ratio, net fixed asset turnover ratio, equity turnover ratio, gross profit ratio, operating profit ratio, expense ratio, net profit ratio, return on assets, and return on equity. Formulas for calculating each ratio are also provided.

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Anita Malhotra
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166 views4 pages

Ratio Analysis Formula Excel Template

The document provides financial information for XYZ Limited for 2021 to calculate various ratios to analyze the company's liquidity, solvency, efficiency, and profitability. Ratios calculated include the current ratio, quick ratio, cash ratio, proprietary ratio, debt-equity ratio, debt ratio, interest coverage ratio, receivables turnover ratio, inventory turnover ratio, payable turnover ratio, asset turnover ratio, net fixed asset turnover ratio, equity turnover ratio, gross profit ratio, operating profit ratio, expense ratio, net profit ratio, return on assets, and return on equity. Formulas for calculating each ratio are also provided.

Uploaded by

Anita Malhotra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Let us take the example of XYZ Limited annual report for 2021 to illustrate the calculation of different ratios

used in Ratio An
As per the latest annual report, the following information is available. Based on the given information, calculate the liquidit
solvency, efficiency and profitability ratios of the company for the year 2021.
62% 50%
Particulars Amount (in Crores)
Sales ₹ 260,174
COGS ₹ 161,782 38% 50%
EBIT / PBIT ₹ 63,930 Earning Before Interest & Tax
EBITDA ₹ 76,477
Operating Expense ₹ 16,178 18%
Interest Expense ₹ 3,576
Net Income ₹ 55,256
Total Debt ₹ 108,047
Total Assets ₹ 338,516
Total Tangible Assets ₹ 189,765
Tangible Net Worth ₹ 135,432
Net Fixed Assets ₹ 37,378
Total Equity ₹ 90,488
Current Assets ₹ 162,819
Current Liabilities ₹ 105,718
Cash & Cash Equivalents ₹ 48,844
Accounts Receivables ₹ 22,926
Inventories ₹ 4,106
Accounts Payable ₹ 46,236

Current Ratio is calculated using the formula given below


Current Ratio = Current Assets / Current Liabilities IDEAL

Current Ratio 1.54 1.3333333 or higher - sometimes "2" also

Net Working Capital is calculated using the formula given below


Net Working Capital = Current Assets - Current Liabilities

Net Working Capital ₹ 57,101 Higher the better

Quick Ratio is calculated using the formula given below


Quick Ratio = (Cash & Cash Equivalents + Accounts Receivables) / Current Liabilities

Quick Ratio 0.68 1 or higher

Cash Ratio is calculated using the formula given below


Cash Ratio = Cash & Cash Equivalents / Current Liabilities

Cash Ratio 0.46 100% or higher


Proprietary Ratio is calculated using the formula given below
Proprietary Ratio = Tangible Net Worth / Total Tangible Assets

Proprietary Ratio 0.71 100% or closer

Debt Equity Ratio is calculated using the formula given below


Debt Equity Ratio = Total Debt / Total Equity

Debt to Equity Ratio 1.19 100% or lesser

Debt Ratio is calculated using the formula given below


Debt Ratio = Total Debt / Total Assets

Debt Ratio 32% 50% or lesser

Interest Coverage Ratio is calculated using the formula given below


Interest Coverage Ratio = EBITDA / Interest Expense

Interest Coverage Ratio 21.39 or higher

Receivables Turnover Ratio is calculated using the formula given below


Receivables Turnover Ratio = Sales / Accounts Receivable

Receivables Turnover Ratio 11.35 or higher

Inventory Turnover Ratio is calculated using the formula given below


Inventory Turnover Ratio = COGS / Inventories

Inventory Turnover Ratio 39.40 or higher

Payable Turnover Ratio is calculated using the formula given below


Payable Turnover Ratio = COGS / Accounts Payable

Payable Turnover Ratio 3.50 0 or higher

Asset Turnover Ratio is calculated using the formula given below


Asset Turnover Ratio = Sales / Total Assets

Asset Turnover Ratio 0.77 or higher

Net Fixed Asset Turnover Ratio is calculated using the formula given below
Net Fixed Asset Turnover Ratio = Sales / Net Fixed Assets

Net Fixed Asset Turnover Ratio 6.96 or higher


Equity Turnover Ratio is calculated using the formula given below
Equity Turnover Ratio = Sales / Total Equity

Equity Turnover Ratio 2.88 or higher

Gross Profit Ratio or Gross Margin is calculated using the formula given below
Gross Profit Ratio = (Sales - COGS) / Sales

Gross Profit Ratio 37.8% 50% or higher

Operating Profit Ratio is calculated using the formula given below


Operating Profit Ratio = EBIT / Sales

Operating Profit Ratio 24.6% 33% or higher

Expense Ratio is calculated using the formula given below


Expense Ratio = COGS / Sales

Expense Ratio 62.2% 50% or lesser

Net Profit Ratio or Net Margin is calculated using the formula given below
Net Profit Ratio = Net Profit (Income) / Sales

Net Profit Ratio 21.2% 25% or higher

Return on Total Asset (ROA) is calculated using the formula given below
Return on Total Asset (ROA) = EBIT / Total Assets

Return on Total Asset 18.9% or higher

Return on Total Equity (ROE) is calculated using the formula given below
Return on Total Equity (ROE) = Net Income / Total Equity

Return on Total Equity 61.1% or higher


t ratios used in Ratio Analysis.
n, calculate the liquidity,

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