Commerce and Accountancy SEBI

What is Current Ratio formula

Current Assets divided by Current Liabilities

What is ideal Current Ratio

2 is to 1

What does Current Ratio measure

Short term liquidity position of a firm

What is Quick Ratio formula

Quick Assets divided by Current Liabilities

What are Quick Assets

Current Assets minus Inventory minus Prepaid Expenses

What is ideal Quick Ratio

1 is to 1

What is Quick Ratio also called

Acid Test Ratio

What is Cash Ratio formula

Cash plus Bank plus Marketable Securities divided by Current Liabilities

What does Cash Ratio measure

Most conservative liquidity position

What is Debt to Equity Ratio formula

Total Debt divided by Shareholders Equity

What is ideal Debt to Equity Ratio

2 is to 1

What does Debt to Equity Ratio measure

Long term solvency and financial risk

What is Proprietary Ratio formula

Shareholders Funds divided by Total Assets

What does Proprietary Ratio indicate

Extent of owner financing in total assets

What is Interest Coverage Ratio formula

EBIT divided by Interest Expense

What does Interest Coverage Ratio measure

Ability to pay interest from operating profits

What is DSCR formula

Net Operating Income divided by Total Debt Service

What does DSCR indicate

Ability to meet principal and interest obligations

What is Inventory Turnover Ratio formula

Cost of Goods Sold divided by Average Inventory

What does Inventory Turnover Ratio measure

Efficiency of inventory management

What is Inventory Holding Period formula

365 divided by Inventory Turnover Ratio

What does lower Inventory Period indicate

Faster movement of stock

What is Debtors Turnover Ratio formula

Net Credit Sales divided by Average Debtors

What does Debtors Turnover Ratio measure

Efficiency of credit collection

What is Average Collection Period formula

365 divided by Debtors Turnover Ratio

What does lower Collection Period indicate

Efficient receivables management

What is Working Capital Turnover Ratio formula

Net Sales divided by Working Capital

What is Working Capital

Current Assets minus Current Liabilities

What is Gross Profit Margin formula

Gross Profit divided by Net Sales

What does Gross Profit Margin indicate

Manufacturing and pricing efficiency

What is Net Profit Margin formula

Net Profit divided by Net Sales

What does Net Profit Margin measure

Overall operational efficiency

What is Operating Ratio formula

Operating Cost divided by Net Sales

Why is lower Operating Ratio better

Indicates better cost control

What is Return on Investment formula

EBIT divided by Capital Employed

What is Capital Employed

Equity plus Long Term Debt

What is Earnings Per Share formula

Profit after Tax divided by Number of Equity Shares

What does EPS indicate

Earning capacity per share

What is Price to Earnings Ratio formula

Market Price per Share divided by EPS

What does PE Ratio reflect

Market expectation of future growth

What is Dividend Yield formula

Dividend per Share divided by Market Price per Share

What does Dividend Yield show

Cash return to investors

What is Base Expense Ratio BER

New mutual fund expense framework introduced by SEBI

What did BER replace

Total Expense Ratio TER

What is benefit of BER

Separates fund management fees from statutory charges

What is new HVDLE threshold

Five thousand crore rupees

What was earlier HVDLE threshold

One thousand crore rupees

What is RPT materiality cap for large entities

Five thousand crore rupees