The numerator of the rate earned on total assets ratio is equal to income before interest. Income, broadly defined, is money received, particularly on a regular basis.
If assets are 3 million and the current ratio is 1.5, the liabilities are 2 million. (current assets = 3 million/ current liabilities of 2 million = 1.5 current ratio.) Inventories have to be 1 million. The quick ratio is current assets = 3 million - 1 million inventory / current liabilities of 2 million equal a quick ratio of 1.
Its the ratio between the assets which generate income for the business to total assets owned by the business.If the ratio is higher, that shows business is in good position.
Fixed assets to total assets ratio describe about the percentage or number of time fixed assets are of total assets. It helps the management to find out that either they are maintaining proper fixed assets and current assets ratio or there may be any changes required in the ratio which is to be maintained because if they maintain high ratio it will affect the depreciation expense and ultimately net income as well.
The ratio between current assets to current liability is called "Current Ratio".
fixed assets / current assets
Equal ratio
If they are both zero, the the fraction is undefined. Otherwise it means that the ratio is equal to one.
this is found by multipling the denominator of one ratio by the numerator of the other ratio
this profitability ratio shows how much income is contributed by assets of a company. generally, assets contribute a majority of income earned. ROA is calculated using the following formula:Return on assets = (Net income / Total assets) x 100
it's mean that total assets and total liabilities are equal for example: total assets are 50,000 and total liabilities are 50,000 so the debt ratio is 1
If assets are 3 million and the current ratio is 1.5, the liabilities are 2 million. (current assets = 3 million/ current liabilities of 2 million = 1.5 current ratio.) Inventories have to be 1 million. The quick ratio is current assets = 3 million - 1 million inventory / current liabilities of 2 million equal a quick ratio of 1.
An improper fraction has the numerator equal to or greater than the denominator.
The numerator of the second ratio and the denominator of the first ratio are called the means, and the numerator of the first ratio and the denominator of the second ratio are called the extremes. The product of the means equals the product of the extremes.
Its the ratio between the assets which generate income for the business to total assets owned by the business.If the ratio is higher, that shows business is in good position.
total asset turnover shows how much revenue is contributed by assets of a company. a higher ratio implies higher revenue earned. it is calculated as follows:Total asset turnover = Revenue / Average total assetsAverage total assets = (Opening total assets + Closing total assets) / 2
Fixed assets to total assets ratio describe about the percentage or number of time fixed assets are of total assets. It helps the management to find out that either they are maintaining proper fixed assets and current assets ratio or there may be any changes required in the ratio which is to be maintained because if they maintain high ratio it will affect the depreciation expense and ultimately net income as well.
fixed assets turnover ratio