which is the important ratio in ratio analysis?
Answers were Sorted based on User's Feedback
Answer / bhushan pawar
In terms of share holder the PE(price to Earning) ratio is
very important gives clear pictureabout the growth of the
organisation as well as return on the amount invested on
share of particular organisation.......
ROI is very important in the perspective of company itself
giving idea about profit made on total investment....
"Liquidity Ratios":"Current and Quick Ratio" helps in
analysing current cash position of the organisation....
"Debt to Equity Ratio" helps you to identify current
financial position or overall health of the organisation
both for investor as well as organisation. it might vary
depends upon the sector to which organisation into.....
"Asset turnover Ratio" specifically for organisation into
mfg. business....Helps to identify investment in assets per
product sold......
"Profit-Margin Ratio"......= Profit/Sales
helpsorganisation to identify profit made by each product
sold....
| Is This Answer Correct ? | 11 Yes | 1 No |
Answer / kiran
i think debt equity ratio and return on equity ratio is most
important because the 1st ratio shows the way the company
finances its working i.e. thru loan(debt) or its equity
basis(owned funds)The lower this ratio the better is the
company which means that the company is less dependent on
the borrowed funds.
roe shows relation of pat and net worth of the company which
is very important for any investors who wants to invest in
the company
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / sravya sri
Liquidity ratio is an impotent one because it says about how
much liquidity that the company maintain is to be indicated
by this ratio
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / abdul nafay khan
Actually all ratios are important but the most important
ratio is efficiency ratio that how much your
company/organization is efficient. Compare it with
industry ratio you get it how much we are efficient
| Is This Answer Correct ? | 0 Yes | 2 No |
Answer / kaushik vedula
ROIC is the most important ratio for any enterprise.
Ofcourse it has the limiatation of not capturing the future
cash flows but is a decent indication. ROIC is the reason
any any business exists. ROIC-WACC gives you the value of
the business
| Is This Answer Correct ? | 0 Yes | 3 No |
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