Ways To Analyse The Financial Performance

Are you searching for ways to analyse financial performance ? If yes, then you are at right place. Here, we are going to share the financial performance anaylsis or ways to analyse financial performance.

Ratios :-

The following ratios are used to analyse the financial performance of the company. These ratios are
basically show the profitability and efficiency of the company.

Sr No. Ratios Formula
1 Retur on total assets EBIT/Total Assets
2 Rate of return on ordinary shares EBIT/ Ordinary Shares
3 Operating Profit Margin Operating Profit/ Total Revenue
4 Inventories turnover period Cost of goods sale/Average Inventory

 

Cash conversion cycle :-

The cash conversion cycle (CCC) is a process or a cycle where the company purchases inventory, sells
the inventory on credit as an account receivable, and then collects the account receivable or turns it
into cash.

Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding – Days Payable
Outstanding

Comparative income statement :-

Comparative financial statements are the complete set of financial statements that an entity issues, revealing information for more than one reporting period.

Final Words :-

These are the ways through which you can analyse the financial performance. If you have any kind of issues or queries feel free to comment below. We will help you ASAP.

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