Methodology of ratio analysis

Payable Turnover They are further sub-divided into 10 ratios as seen in the diagram below.

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This ratio measures the debt servicing capacity of a firm insofar as fixed interest on long-term loan is concerned. It is an important tool of financial analysis to appraise the financial structure of a firm.

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It seems using more debt compared to the industry and which might put the firm under risk pressure but indicate high leverage. E-Banking: Electronic banking system is the system that allows the individual to do the banking activities by sitting in one place.

Hypothesis of ratio analysis

Introduction 7 1. IN G a li g n s its business strategy around a universal customer ideal saving and investing for the future should be easier. For eg. The origin of the erstwhile Vysya Bank was pretty humble. The questionnaire explicitly stated the purpose of study as academic and assured confidentiality of information solicited from the respondent. Mostly from books, journals and periodicals. So, the qualitative information will also need to understand the purpose of the firm to use any of the tools to measure their performance. The review of literature in any research is based on secondary data. It provides the principal means by which savings are transformed into investments. However, in order to capture significant gains from the growth of the ICT industry worldwide, policy makers and firms both require a clear understanding of its dynamics. It is defined as the systematic use of ratio to interpret the financial statements so that the strengths and weaknesses of a firm as well as its historical performance and current financial condition can be determined. That sample group will be tested, analyzed by assuming that sample group represents the entire group Crouch, S.

The importance of ratio analysis relies in the fact that it presents facts on a comparative basis Conclusions can be drawn regarding the liquidity position of a firm.

In every organization, where funds are involved, sound financial management is necessary. Return on Asset ROA There is always a conflict when it comes to calculation of Earnings retention ratio, the managers of the company want a higher earnings retention ratio or plowback ratio, while the shareholders of the company would think otherwise, as the higher the plowback ratio the uncertain their control over their shares and finances are.

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Many analysts use ratios to review sectors, looking for the most and least valuable companies in the group. It helps in inter-firm comparison and also with industry averages. Current ratio Liquidity Ratio Qualitative research is the method where the researcher set the questionnaire which will give to large number of respondents Hair, Wolfinbarger, Ortinau, and Bush,p

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Ratio Analysis Definition