Question

Describe the differences and similarities between financial position ratios and financial performance ratios.

Answer 1

solution:

Contrasts and likenesses between money related position proportions and budgetary execution proportions

Money related POSITION RATIOS

The term money related position proportions alludes to the proportions which mirror the genuine budgetary position of the organization. The budgetary position proportions which is regularly utilized for investigating the money related position of the organization is are given underneath:

1-Inventory Turnover proportion

The term stock turnover proportion demonstrates the speed with which stock completed products is sold i.e, supplanted. For the most part it is communicated as number of times the normal stock has been "turned over" or pivot of amid the year.

Equation:

Cost of products sold/Avg load of completed merchandise

High turnover proposes proficient stock control, sound deals strategies, exchanging quality products, notoriety in the market, better focused limit, etc.

Low turnover recommends the likelihood of stock containing old things, moderate moving items, poor moving approach, over interest in stock and so forth.

Along these lines as above money related position proportion of stock turnover proportion clarifies the monetary position of high and low in the market simply like some other budgetary proportion which the budgetary position of the organization are given underneath

2-Raw material turnover proportion

3-Work in advancement turnover proportion

4-Debtors turnover proportion

5-Creditors turnover proportion

6-Working capital proportion

7-Fixed resources turnover proportion

8-Capital turnover proportion

Money related PERFORMANCE RATIOS

The term money related execution proportion alludes to the proportion which clarifies the execution of the organization. The principle execution estimating proportion of the organization are given beneath

1-Return on Investment

Rate of profitability is a proportion between the net benefit and cost of speculation coming about because of a venture of a few assets. A high ROI implies the speculation's additions positively to its expense. As an execution measure, ROI is utilized to assess the productivity of a speculation or to analyze the efficiencies of a few distinctive venture. It is an execution measure utilized by organizations to distinguish the productivity of a venture or number of various speculations.

Recipe

Gaining before intrigue and duties/Equity + obligations

Along these lines from above budgetary execution proportion of rate of profitability demonstrates the execution of the organization as to rate of profitability of the amount we gain from putting cash in the organization. Much the same as above there are other execution estimates which typically utilized by the organization's for assessing their execution are given beneath.,

2-Return on Equity

3-Return on Assets

4-Earning per share

5-Dividend per share

6-Price winning proportion

7-Dividend Yield

8-Book esteem per share

9-Market an incentive to book esteem