What are the 5 banking ratios?
5 Essential Financial Ratios for Every Business. The common financial ratios every business should track are 1) liquidity ratios 2) leverage ratios 3)efficiency ratio 4) profitability ratios and 5) market value ratios.
- Liquidity ratios.
- Leverage ratios.
- Efficiency ratios.
- Profitability ratios.
- Market value ratios.
- Market ratios. As a financial analyst , you can use market ratios to determine whether the current trade price of a stock reflects its true worth. ...
- Liquidity ratios. ...
- Debt ratios. ...
- Profitability ratios. ...
- Activity ratios.
- Business model of a bank. ...
- Growth in Advances and Deposits. ...
- Capital Adequacy Ratio (CAR) ...
- Cost to Income ratio (CIR) ...
- Current Account Savings Account (CASA) ...
- Gross Non-Performing Assets (GNPA) ...
- Net Non-Performing Assets (NNPA) ...
- Net Interest Margin (NIM)
- Gross profit margin.
- Operating profit margin.
- Net profit margin.
- Return on assets.
- Return on equity.
There are six basic ratios that are often used to pick stocks for investment portfolios. Ratios include the working capital ratio, the quick ratio, earnings per share (EPS), price-earnings (P/E), debt-to-equity, and return on equity (ROE).
- Earnings per share (EPS) ...
- Price/earnings ratio (P/E) ...
- Return on equity (ROE) ...
- Debt-to-capital ratio. ...
- Interest coverage ratio (ICR) ...
- Enterprise value to EBIT. ...
- Operating margin. ...
- Quick ratio.
What are the five methods of financial statement analysis? There are five commonplace approaches to financial statement analysis: horizontal analysis, vertical analysis, ratio analysis, trend analysis and cost-volume profit analysis. Each technique allows the building of a more detailed and nuanced financial profile.
In general, there are four categories of ratio analysis: profitability, liquidity, solvency, and valuation. Common ratios include the price-to-earnings (P/E) ratio, net profit margin, and debt-to-equity (D/E).
| Details | Percentage |
|---|---|
| Bank Rate | 6.75 |
| Fixed Reverse Repo Rate | 3.35 |
| Cash Reserve Ratio(CRR) | 4.50 |
| Statutory Liquidity Ratio(SLR) | 18.00 |
What are the top three financial ratios?
5 Essential Financial Ratios for Every Business. The common financial ratios every business should track are 1) liquidity ratios 2) leverage ratios 3)efficiency ratio 4) profitability ratios and 5) market value ratios.
To monitor liquidity, a bank might have a current ratio or quick ratio. The current ratio is simply current assets over current liabilities. The quick ratio is slightly more conservative measuring only highly liquid current assets, such as cash and accounts receivable, over current liabilities.
The profit/loss ratio is the average profit on winning trades divided by the average loss on losing trades over a specified time period.
Common profitability ratios used in analyzing a company's performance include gross profit margin (GPM), operating margin (OM), return on assets (ROA) , return on equity (ROE), return on sales (ROS) and return on investment (ROI).
The operating profitability ratio is often considered the best one out of the three. It tells an organization how well it manages its costs. This is after all operating expenses have been deducted from sales. The contribution profitability ratio is useful for marketing purposes.
- Current Ratio. ...
- Quick Ratio. ...
- EBITDA. ...
- Debt-to-Equity Ratio. ...
- Debt Service Coverage Ratio. ...
- Days Sales Outstanding. ...
- Inventory Turnover.
So a long-term creditor would be most interested in solvency ratios. Solvency is defined as a company's ability to satisfy its long-term obligations. The three critical solvency ratios are debt ratio, debt-to-equity ratio, and times-interest-earned ratio.
The 70-20-10 budget formula divides your after-tax income into three buckets: 70% for living expenses, 20% for savings and debt, and 10% for additional savings and donations. By allocating your available income into these three distinct categories, you can better manage your money on a daily basis.
- Price-Earnings Ratio (PE) This number tells you how many years worth of profits you're paying for a stock. ...
- Price/Earnings Growth (PEG) Ratio. ...
- Price-to-Sales (PS) ...
- Price/Cash Flow FLOW 0.0% (PCF) ...
- Price-To-Book Value (PBV) ...
- Debt-to-Equity Ratio. ...
- Return On Equity (ROE) ...
- Return On Assets (ROA)
In short, a “good” liquidity ratio is anything higher than 1. Having said that, a liquidity ratio of 1 is unlikely to prove that your business is worthy of investment. Generally speaking, creditors and investors will look for an accounting liquidity ratio of around 2 or 3.
What is a good debt to equity ratio?
Generally, a good debt to equity ratio is around 1 to 1.5. However, the ideal debt to equity ratio will vary depending on the industry, as some industries use more debt financing than others.
- Income statement.
- Cash flow statement.
- Statement of changes in equity.
- Balance sheet.
- Note to financial statements.
A low debt-to-equity ratio means the equity of the company's shareholders is bigger, and it does not require any money to finance its business and operations for growth. In simple words, a company having more owned capital than borrowed capital generally has a low debt-to-equity ratio.
Several techniques are commonly used as part of financial statement analysis. Three of the most important techniques are horizontal analysis, vertical analysis, and ratio analysis. Horizontal analysis compares data horizontally, by analyzing values of line items across two or more years.
A deteriorating profit margin, a growing debt-to-equity ratio, and an increasing P/E may all be red flags.
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