Free Essay

Chartered Acc

In:

Submitted By pritinahar
Words 629
Pages 3
RATIO ANALYSIS
Ratios are a very important part in our day to day lives. We need ratios while we cook food, we need ratios while deciding priorities in our life, we basically need ratios in every aspect of our lives. And for every business or financial decision, ratios and their analysis play a very vital role.
RATIO ANALYSIS is a widely used tool for financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between 2 variables. This relationship can be expressed as (i) percentages say net profits are 25% of sales (ii) fractions say net profit is one fourth of sales and (iii) proportion of numbers, say the relationship between net profit and sales 1:4. What the ratios do is that they reveal the relationship in a more meaningful way so as to enable the equity investors, management and lenders make better investments and credit decisions.
The significance and importance of ratio analysis may be explained as follows:
• It helps in evaluating the corporations performance:
• It helps in inhume firm comparison:
• It simplifies money statements

http://www.nippur.nl/Services/BusinessPlanning/tabid/95/Default.aspx
Basis of comparison:
The use of ratios as a tool of financial analysis, involves their comparison , for a single ratio like absolute figures fails to reveal their true position. For example, if in case of a firm, the return on capital employed is 15% in a particular year, what does that indicate? Only if the figure is related to the fact that in the preceding year the relevant return was 12% or 18% , it may be inferred whether or not the profit of the firm has declined or improved. or else, if we all know that the come for the whole trade is 100 percent or 2 hundredth, the profit of the firm in question may be evaluated.
Comparison with connected facts, is so the idea ratio analysis. Four styles of comparisons square measure concerned, (i) trend ratios (ii) inter firm comparison (iii) comparison of things at intervals one year’s finances of a firm (iv) comparison with standards or plans

Types of ratios:
The ratios may be classified into following four broad categories:

1. Liquidity ratios 2. Capital structure/ leverage ratios 3. Activity ratios 4. Profitability ratios
1. Liquidity ratios:
Liquidity or short term economic condition suggests that the power to pay its short term liabilities. Inability to pay off short term liabilities affects its believability yet as its credit rating. Historically, 2 ratios square measure accustomed highlight the business liquidity. These are current ratios and quick ratios. Other ratios are cash ratio, interval measure ratio and net working capital ratio. * Current ratios: it is one of the best known measures of financial strength

Current ratio= current assets/ current liabilitiesCurrent assets= inventories+ sundry debtors+ cash and bank balances+ receivables+ loans and advances+ disposable investmentsCurrent liabilities=creditors for goods and services+ short term loans+ bank overdraft+ cash credit+ outstanding expenses+ provision for taxes+ proposed dividend+ unclaimed dividend |

The generally acceptable current ratio is 2:1. It also depends on many other factors like the nature and characteristics of the firm. * Quick ratios: it is sometimes also called as acid test ratio and is one of the best measure of liquidity

Quick ratio or acid test ratio= quick assets/ current liabilitiesQuick assets= current assets –inventoriesCurrent liabilities= as mentioned under current ratio |
An acid test of 1:1 is eligible unless the majority of quick assets are in accounts receivables and the pattern of the accounts receivables collection lags behind the schedule for paying current liabilities.

Similar Documents

Free Essay

Justiication Report

...GUIDELINES...............................................................................7 REAR YARD FENCE GUIDELINES ......................................................................................9 PLAY EQUIPMENT GUIDELINES ......................................................................................11 SATELLITE RECEIVER (DISH) GUIDELINES ..................................................................13 GENERAL IMPROVEMENTS, LANDSCAPE & MAINTENANCE GUIDELINES..........14 LIST OF RECOMMENDED PLANT SPECIES ....................................................................19 EXHIBIT A REQUEST FORM 2 CHRISTENBURY MASTER ASSOCIATION, INC. ARCHITECTURAL CONTROL COMMITTEE INTRODUCTION The Architectural Control Committee (ACC) is providing the attached Architectural Design Guidelines (“Guidelines”) in accordance with that Declaration of Covenants, Easements, Conditions and Restrictions (“Declaration”), for purposes of establishing and maintaining exterior design elements throughout Christenbury. This document should be filed with the homeowners’ copy of the Declaration received at closing. It is the responsibility of each homeowner to pass along the Declaration and Guidelines to any future buyer of their home at Christenbury. It is important to note that the Guidelines are applicable to most all future building exterior and property...

Words: 5815 - Pages: 24

Free Essay

Business Law

...Jose Cando ENGL-2327 April 26, 2014 Balcones Fiction and Poetry Winners Reading Event: Natalie Diaz’s Reading of When My Brother Was an Aztec Outside the ACC Theater on April 9th, the public was greeted by tables of refreshment including fruits cheeses and crackers which was a nice surprise. Although, I had expected a packed theater, only about forty people were waiting inside. The event started at 6:30 pm when Charlotte Gullick, the chair of the creative a writing department took the stage. After promoting some of creative writing classes at ACC, she described the significance of the Balcones prizes. A teacher from the English department took the stage next to talk a little more about the Balcones prize. He pointed out that Natalie Diaz was the sixteenth winner of this prize. He described Ms. Diaz as a woman with her foot “in three different worlds.” Her childhood was spent on the Mojave reservation in the California Desert. She attended college in Virginia on a basketball scholarship, and from there she played professional basketball in Europe and Asia. After injuring her knee, she left basketball to study poetry in graduate school. Therefore, he claimed, she has a foot in the worlds of the reservation, basketball and poetry. With that, he welcomed Nathalie to the stage. Nathalie jumped into reading her poem, “When My Brother Was an Aztec.” I was shocked to hear the bitterness and resentment in her voice as she describe her brother as a nasty and careless force which...

Words: 668 - Pages: 3

Free Essay

Chartered Accountant

...CURRICULUM VITAE CA. SAHIL JAIN E-MAIL : sahiljain69@gmail.com MOB. NO. : 09469212042, 09018709963 CAREER OBJECTIVE: To work with a reputed organisation which provides challenging environment, encourages continuous learning, creativity and exposure to new ideas and cultures which stimulates personal and professional growth and to become a reputed professional in the field of Taxation, Accounts, Audit and Finance Department. ACADEMIC CREDENTIALS: ...

Words: 361 - Pages: 2

Free Essay

Kucky

...Final Course Frequently Asked Questions (FAQs) -------------------------------------------------------------------------------------------------------------------------- 1. When student is admitted for CA Final Course? Student after passing Intermediate/ Professional Education (Examination-II)/ Professional Competence Examination/ Integrated Professional Competence Examination (IPCE)/ Intermediate (IPC) Examination in its entirety can enroll for CA Final Course. Students, who pass IPCE / Intermediate (IPC) Examination in its entirety, are required to register for Final course immediately and start preparation for Final Examination. 2. What is the Final Course registration fee payable by students who passes Integrated Professional Competence Examination (IPCE)/ Intermediate (IPC) Examination? Student who has passed Integrated Professional Competence Examination (IPCE)/ Intermediate (IPC) Examination are required to pay the following fee while registering for Final Course: Admission to Final Course Registration Fee (INR) Registration Fee (US$) After passing IPCE/ Intermediate (IPC) Examination Rs. 10,000/- + Rs. 2,000 towards Article Registration Fee, if not paid earlier 750 + 50 towards Article Registration fee, if not paid earlier 3. What are the eligibility criteria for different scheme to appear in the Final Examination? Eligibility criteria for appearing in the Final examination are given below: Sl. No. Category of Students Eligibility Criteria to...

Words: 5342 - Pages: 22

Premium Essay

Worden Scenario

...A MEETING OF MINDS? Worden is a medium-sized industrial town in the Midlands. It grew up around the local electronics plant, which is part of a large international group that makes and supplies electrical components to the automotive industry. The economic fortunes of the town have consequently tended to fluctuate with the fortunes of the plant, and therefore, the automotive industry. The last decade has however been a relatively stable period for the town and it is thought that there will not be a change to the low rate of economic growth in the area. The electronics manufacturer is the major employer in the area. Also in Worden there is a reasonable amount of industry and commerce comprising mainly of small engineering works and the necessary industrial, commercial and retail services. There are also a number of large farms on the outskirts of the town. There are two accountancy partnerships in the town. They provide accounting, audit, taxation and, when necessary, consultancy services to a range of customers in the town. However, the electronics manufacturer uses one of the big international accounting firms. Mann and Mann is the older of the two practices. It was founded by the father and uncle of the current Senior Partner. Its clients include all of the local farmers along with a mixture of the other businesses in the town. It is located in the centre of the town in very spacious accommodation that it owns. This part of town is also the site of many of the town’s...

Words: 1009 - Pages: 5

Premium Essay

The Role of Accountant in Third-Tier Level of Government

...ABSTRACT The research is extensively to examine he rule of accountants in Third tier government and with particular reference to Brass Local Government Area of Bayelsa State. It will cleanly stray the importance of accountants in the third-tier government which is the local government level. The functions, duties and operational system of accountants in local government system can not be over stated. The research also went further to deals on the financial control and dealing of movement of fund or finance in the local Government system. At the end of this research, the role of accountant on accountability, probity and transparent way of spending local government finds will be the Hall mark of this work as to assist accountants in the third tier of the government to acquaint with its functions. This research is also to found out some problems that face the accountant and to proffer solutions to which is to better the accounting system as profession. 1 TABLE OF CONTENT Title page…………………………………………………………………………………..i Certification ………………………………………………………………………………ii Dedication …………………………………………………………………………………iii Acknowledgment……………………………………………………………………….iv Abstract …………………………………………………………………………………….v CHAPTER ONE INTRODUCTION 1.1 Back ground of the study 1.2 Statement of problem 1.3 Objective of the study 1.4 Significance of the study 1.5 Scope and limitation of the study 1.6 Literature Review 1.7 Hypothesis 1.8 Method of Data Collection and Analysis 1.9 Definition of Terms CHAPTER...

Words: 4746 - Pages: 19

Premium Essay

Services by Ca

...of recent times is the rapid growth of the accountancy profession. The vast changes occurring in the economy of the country have been placing great responsibilities on the Chartered Accountants. It also constitutes a challenge to the profession to bring to bear their knowledge and skill in their specialised fields of activity. The types of functions generally performed by the Chartered Accountant are varied. The more important ones amongst them are discussed below. Accountancy This includes the writing up of accounts and the preparation of financial statements. It encompasses a wide area ranging from simple Book keeping to complex financial analysis. Auditing Possibly one of the most important functions of a Chartered Accountant, it is here that his specialised training, skill and judgment are most often called into play. The purpose of auditing is to satisfy the users of financial statements that the accounts presented to them are drawn up on correct accounting principles and that they represent a true and fair view of the state of affairs of the organisation. Taxation With a number of taxes on the statute book, current and continuing tax information has become vital to the effective economics of business management. The assessment of taxes is very closely linked with financial accounts. The Chartered Accountant with his experience in accounts is in an advantageous position for preparing the returns for tax purposes, representing assessees before the Income-Tax authorities...

Words: 1140 - Pages: 5

Premium Essay

Organizational Behaviour

...Hamilton, New Zealand, with manufacturing plants in South Auckland and Christchurch. The company manufactures equipment for the dairy industry. In its early years it focused on the domestic market, but in the last five years it has expanded into the export market. The company employs 450 people, which makes it a large company by New Zealand standards. The accounting department at the head office is organised into two sections: cost accounting and management information services (MIS). The accounting department is structured as shown in Exhibit 1. Exhibit 1: Description of Employees in the Case Name Rob Poor Position Chief accountant Description Rob is the accounting department manager. He is 40 years old and is a qualified accountant with a chartered accounting (ACA) qualification. He has been with the company for six years. He is an unassuming person regarded as a bit ‘soft’ by his staff. cost Vernon is 30 years old and is a graduate with an ACA qualification. He joined the company 18 months ago. He is considered an easygoing type and is well liked by his staff. Peter is 37 years old and has a science degree in dairy technology. He is also studying part-time for a management degree through Massey University. He is regarded as ‘moody’ and is not well liked by his staff. Vernon Moore Chief accountant Peter Bruton Management accountant Fran, the New Graduate Fran Hayden was in the final year of her bachelor of management studies (BMS) degree at the University of Waikato...

Words: 1933 - Pages: 8

Free Essay

Questionnaire

...academic purposes and your identity will be kept confidential at all times. Your voluntary participation in this questionnaire is greatly appreciated. Thank you for your time and participation. Sincerely, Khairani Binti Mohd Rawi Final year student of Bachelor of Accounting Department of Accounting and Finance Faculty of Economics and Management Universiti Putra Malaysia Please TICK (√ ) the level of agreement or disagreement for the following statements by using the scales below: SD – Strongly Disagree QA – Quite Agree D – Disagree A – Agree QD – Quite Disagree SA – Strongly Agree SECTION A: Job Selection |  |SD |D |QD |QA |A |SA | |1. |I will work as a chartered accountant after my graduation. |  |  |  |  |  |  | |2. |Please choose one of the following below as your career aspiration: Public accounting Internal auditing Goverment/nonprofit Industrial accounting Graduate/law school Other | | | | | | | | SECTION B: Non academic activity involvement 1. What type of main co-curricular activity do you had involve? __________________________ 2. The level of...

Words: 348 - Pages: 2

Premium Essay

Audit Independence Letter

...White & Rosen Certified General Accountants 150 Brant Street Burlington, Ontario L1L 1L5 February 18, 2008 Dr. Beatrice Simcoe, President Brant Animal Hospital Professional Corporation 100 Brant Street, Burlington, Ontario L1L 1L1 Dear Dr. Simcoe: We have been engaged to audit the financial statements of Brant Animal Hospital Professional Corporation (“the Company”) for the year ended December 31, 2007. Canadian Generally Accepted Auditing Standards (GAAS) requires us to communicate at least annually with you regarding all relationships between the Company and us that, in our professional judgment, may reasonably be thought to bear on our independence. In determining which relationships to report, these standards require us to consider relevant rules and related interpretations prescribed by the appropriate provincial institute and applicable legislation, covering such matters as: • holding a financial interest, either directly or indirectly, in a client; • holding a position, either directly or indirectly, that gives the right or responsibility to exert significant influence over the financial or accounting policies of a client; • personal or business relationships of immediate family, close relatives, partners or retired partners, either directly or indirectly, with a client; • economic dependence on a client; • provision of services in addition to the audit engagement; • making journal entries or accounting classification without...

Words: 410 - Pages: 2

Free Essay

Accountant

...RESUME Okezie Uzochi Chinkata, ACA. No 1 New Umuahia Road Ogbor-Hill, Aba Abia State, Nigeria 07035238142, 08056738845 uzochioks@yahoo.com Career Objective: To join an organization that will provide me challenging accounting goals and tremendous career growth opportunities. To advance my career as renowned chartered accountant Summary of Qualifications: • Perfect understanding of the fundamental accounting concepts with extra ordinary ability to apply them in a varied manner • Holding the valid charter • Extensive accounting practices exploring various aspects of the economy • Excellent communication and comprehension skills • Close exposure to foreign policies and trade policies plasticized by various nations across the world Professional Experience: Adventist Health International-SDA Hospital, Aba, (2011-Present) Chartered Accountant {Treasurer} • Ability to ensure that all financial and accounting reports are prepared in compliance with NASB & IFRS and submitted in a timely manner • Managing their financial systems and budgets • Carrying out periodic risk analysis about the various financial decisions of the organization • Performing periodic financial audit of the company • Conducting regular meetings with the senior management providing expert financial advice for the decision making process • Providing special advise with deeper study with the orientation of raising the profitability...

Words: 461 - Pages: 2

Premium Essay

Financial Accounting of Icab

...whose have ability. The main research objective is to determine "the development of financial accounting and the role of ICAB". Their literature review describes the main viewpoints in the literature, strategies of various viewpoints and so on. The development of accounting not very easy project or analysis subject in accounting policy. So many companies are trying to do their best to develop their accounting in finance. Which prompt us to formulate some hypotheses; this methodology helps us to see the development of financial accounting as a spot shoot. This methodology also enables us to explain the academic value of our research on this topic; and enable us to define the method and technique of financial accounting. The Institute of Chartered Accountants of Bangladesh (ICAB) has been constantly pursuing that noble duty in the CA professionals. ICAB is the sole apex body responsible for regulating the profession of accountants and the matters connected therewith in Bangladesh established under the Presidential Order No. 2 of 1973. ICAB has two regional Offices and two regional committees in Dhaka and Chittagong. Introduction: A field of accounting that treats money as a means of measuring economic performance instead of as a factor of production. It encompasses the entire system of monitoring and control of money as it...

Words: 4634 - Pages: 19

Free Essay

Flyer

...to Experience the PwC A.F.FERGUSON & CO., Chartered Accountants a member firm of the PwC network A.F.FERGUSON & CO., a member firm of the PwC network, is committed to quality service and training since more than 100 years now! It is yet again providing you a unique opportunity to experience the journey of professional learning. Do you see your future that will take you to higher levels; the level which will drive you to achieve leadership in the corporate world? Whatever your vision!!! If it involves obtaining best professional qualification then you have found a home in A.F.FERGUSON & CO., Chartered Accountants. We focus on client value We put ourselves in our client’s shoes We measure our success by yours. Your chance to be an audit trainee arises this summer as A.F.FERGUSON & CO., Chartered Accountants is starting its recruitment process! Schedule: If you meet the Firm's eligibility criteria and want to be part of the Firm, apply online Online applications will be accepted from April 13 to April 24, 2015 at www.affco.com.pk Assessment Test: May 16, 2015 (Tentative) Interview Dates: May 28, 2015 (Tentative) Eligibility criteria: Only ICAP FTS batch 8-12 students who have passed at least 3 papers of intermediate examination (i.e. Module C & D / certificate of accounting and finance) can apply In case of queries access our help line at: aff.websupport@pk.pwc.com © 2013 A. F. FERGUSON & CO., Chartered Accountants, a member firm of the PwC network...

Words: 298 - Pages: 2

Premium Essay

Fran Hayden

...South Auckland and Christchurch. The companv manufactures equipment for the dairy industiy. In its early years ii focused on the domestic market, but in the last five years it has expanded into the export market. The Exhibit 1 Description of Employees in the Case company employs 450 people, which makes it a large company bj New Zealand standards. This case focuses on events in the accounting department at ilie head office, which is organized into two sections: cost accounting and management information services (MIS). The accounting department is structured ;is shown in Exhibit 1. rwn Moore Chief cost accountant Management accountant Rob is the accounting department manager. He is 40 years old and is a qualified accountant with a chartered accounting (ACA) qualification. He has been with the company for six years. He is an unassuming person regarded as a bit "soft" by his staff. Vernon is 30 years old and is a graduate with an ACA qualification. He joined the company 18 months ago. He is considered an easygoing type and is well liked by his staff. Peter is 37 years old and has a science degree in dairy technology. He is also studying part-lime (or a management degree through Massey University. He is regarded as "moody" and is not well liked by his staff. Fran, the New Graduate Fran Harden was in the final year (if her bachelor of management studies IBMS) degree at the University of WaikaUx where she hud proved to be a high achiever. Fran was interested in a position with...

Words: 974 - Pages: 4

Premium Essay

What Is the Role of the Accountant

...What is the role of the accountant? There are many things that make a business successful whether it is the quality of the product/service that is provided, the advertising and marketing of a business or the reputation that a firm has built up, but for any business to run smoothly it is fundamental that the accounts are correct, well kept and provide the essential financial information in order for a business to see what sort of financial position it is in and for directors or people who run the business to make important financial decisions to ensure the survival of a business. The function of accounting allows a company to keep records of all its financial history and allows the organisation make decisions based on the information. A well known definition of accounting is ‘The process of indentifying, measuring, and communicating economics information to permit informed judgements and decisions by users of the information’ (Wood, 2008, p.332). It is all based around the provision of financial information about a business entity to the financial decision makers of the business. It is also a legal requirement for businesses especially private limited and public limited companies to provide precise figures in their books and accounts in order to prove they are not committing fraud. Therefore the role of the accountant is highly significant and businesses must ensure they employ adept accountants to keep the day-to-day running of a business’s finances, accounts and books in good...

Words: 1588 - Pages: 7