Fs Analysis

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Management Advisory Services

Topic – FINANCIAL STATEMENTS ANALYSIS

Most Commonly Used Ratios – Formula and Significance

|1. Ratios to measure PROFITABILITY | |

|Name |Formula |Significance |

| | | |

| | |Indicates net profit per peso of |

|a. Rate of Return on Sales | |sales or the profitability based on |

| | |sales |

| | | |

| | |Indicates the profitability in the use of |

|b. Rate of Return on | |invested capital or the amount of return |

|Stockholders’ Equity | |per peso of stockholders’ equity. |

| | | |

| | |Number of times total investment (total |

| | |assets) turned over....