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Profitability Ratios (Interpretation)

Interpretation The expenses ratio is closely related to the profit margin, gross as well as net. For instance, if the operating profit margin is deducted from 100 per cent, the operating ratio. Alternative, when the operating ratio-is subtracted from 100 per cent, we...

Profitability Ratios Related to Sales

Profitability Ratios Related to Sales These ratios are based on the premise that a firm should earn sufficient profit on each rupee or sales. If adequate profits are not earned on sales, there will be difficulty in meeting the operating expenses and no returns will be...

Profitability Ratios

Profitability Ratios Apart from the creditors, both short-term and long-term, also interested in the financial soundness of a firm are the owners and management or the company itself. The management of the firm is naturally eager to measure its operating efficiency....

Debt-Service Coverage Ratio (DSCR)

Debt-Service Coverage Ratio (DSCR) Is considered a more comprehensive and apt measure to compute debt service capacity of a business firm. It provides the value in terms of the number of times the total debt service obligations consisting of interest and repayment of...