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Earning per Equity share (EPS): it shows the amount of earnings attributable to each equity share.
Profits available for Equity shareholders
Number of Equity shares
Dividend yield ratio: it shows the rate of return to shareholders in the form of dividends based in the market price of the share.
Dividend per share
---------------------------- X100
Market price per share
Price earnings ratio: it a measure for determining the value of a share. May also be used to measure the rate of return expected by investors.
Market price of share
------------------------------------X 100
Earnings per share (EPS)
Current ratio: it measures short-term debt paying ability.
Current Assets
Current Liabilities
Debt-Equity Ratio: It indicates the percentage of funds being financed through borrowings; a measure of the extent of trading on equity.
Formula: Total Long-term Debt
Shareholders’ funds
Fixed Assets ratio: This ratio explains whether the firm has raised adequate long-term funds to meet its fixed assets requirements.
Formula: Fixed Assets
Long-term Funds
Quick Ratio: The ratio termed as ‘liquidity ratio’. The ratio is ascertained y comparing the liquid assets to current liabilities.
 Liquid Assets
Current Liabilities
Stock turnover Ratio: The ratio indicates whether investment in inventory in efficiently used or not. It, therefore explains whether investment in inventory within proper limits or not.
Formula: cost of goods sold
Average stock
Debtors Turnover Ratio: The ratio the better it is, since it would indicate that debts are being collected more promptly. The ration helps in cash budgeting since the flow of cash from customers can be worked out on the
basis of sales.
Formula: Credit sales
Average Accounts Receivable
Creditors Turnover Ratio: It indicates the speed with which the payments for credit purchases are made to the creditors.
Formula: Credit Purchases
Average Accounts Payable
Working capital turnover ratio: It is also known as Working Capital Leverage Ratio. This ratio indicates whether or not working capital has been effectively utilized in making sales.
Formula: Net Sales
Working Capital
Fixed Assets Turnover ratio: This ratio indicates the extent to which the investments in fixed assets contribute towards sales.
Formula: Net Sales

Fixed Assets
Pay-outs Ratio: This ratio indicates what proportion of earning per share has been used for paying dividend.
Formula:                            Dividend per Equity
Earning per Equity share
Overall Profitability Ratio: It is also called as “Return on Investment” (ROI) or Return on Capital Employed (ROCE). It indicates the percentage of return on the total capital employed in the business.
Formula:                      Operating profit
------------------------X 100

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