Its time to revamp the Financial basics..
In-depth understanding of Important Financial Formula and Ratios Twitter: shuchi_nahar What are Financial Ratios? Financial ratios are created with the use of numerical values taken from financial statements to gain meaningful information about a company. The numbers found on a company’s financial statements – balance sheet, income statement, and cash flow statement – are used to perform quantitatively analysis and assess a company’s liquidity, leverage, growth, margins, profitability, rates of return, valuation, and more. Return on Assets (ROA) ROA tells an investor how much Profit or Return a company generated for each Rupee of Assets. The formula for Return on Assets ROA = Earnings/Assets Alternatively, this can also be expressed as ROA = (Earnings/Sales) x (Sales/Assets), or Formula Dissection ROA = Net Margin x Asset Turnover The first component of Return on Assets is simply Net Margin or Net Income divided by Sales. It tells us how much of each Rupee o...