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Accounting Ratios = Interest on Long-term Borrowings + Loss on Sale of = Interest received on investments + Gain (Profit) on Sale 3.5

it means Gross Sales less Sales Return. Revenue from operations means Gross Revenue less Sales Return. In terms of sales, Net Assets = Total Assets – Current Liabilities. Gross Profit = Revenue from Operations – Cost of Revenue from Operations. Cost of Revenue from Operations = Opening Inventory (excluding Stores and Spares and Loose Tools) + Net Purchases + Direct Expenses – Closing Inventory (excluding Stores and Spares and Loose Or Cost of Materials Co

Times % Tools). % % % %

This ratio shows the number of times Net Assets or Capital Employed is rotated or used in generating Revenue from Operations. Higher turnover ratio means better and efficient utilisation of net assets or capital employed and thus, higher profitability & liquidity. IV. PROFITABILITY RATIOS This ratio indicates the relationship between gross profit and revenue from operations (Net sales). Higher the Ratio, lower the cost of goods sold. This ratio is calcula

Net Assets or Capital Employed Turnover Ratio = Revenue from Operations Capital Employed Gross Profit ×100 Revenue from Operations Cost of Revenuefrom Operations + Operating Expenses 100 rom Operations Revenue fr Or OperatingCost RevenuefromOperations ×100 Operating Profit Ratio OperatingProfit ×100 Revenue from Operations Net Profit after Tax ×100 Revenue from Operations Return on Investment or Return on Profit before Interest,

6 Gross Profit Ratio 1. Operating Ratio 2. 3. Net Profit Ratio 4. 5. Capital Employed