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Financial Ratios

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robelle rizon

on 29 August 2014

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Transcript of Financial Ratios

Financial Ratios
A. Solvency
C. Volume of Business to Total Asset
B. Liquidity
Earnings per share ratio
Rate of interest on share capital
Administrative Efficiency
Institutional Strength
Expressed relationships among items found in the financial statements
Summarizes large quantities of data and compares firm's performance
Provides a meaningful evaluation of the company's financial condition
What is a good number?
Comparison from year to year with the company of interest
Asset Yield
Operational self-sufficiency
Profitability Performance
Measures the capacity of the cooperative to provide earnings to members' capital contribution
measures how effectively the firm's asset are being to used to generate profits
measures the earning power of the members
Measures the ability of the firm to sustain its operations
Cost of managing the firm's asset
measures the income or operating success of a company for a given time
Net Institutional Capital
measures institutional capital after subtracting all the losses
measures the coop's ability to service its members' deposit and withdrawal on time
Adequacy of provisioning
measures the adequacy of allowance for losses on loans
Structure of Assets
A. Asset Management Ratio
attempt to measure the firm's success in managing its assets to generate income
A. Non-earning Asset
B. Members' Equity to Total Asset
measures percentage of asset financed by share capital
C. Deposit Liability to Total Asset
measures total asset financed by deposit
Total Loans to Total Asset
Measures percentage of asset invested in loan portfolio
B. Debt Management Ratio
shows the extent to which a firm uses debt financing or financial leverage
shows how much of the company's operation comes from debt instead of other forms of financing
A. External Borrowings to Total Asset

measures the dependence of the cooperative to external borrowings
B. Debt to Total Asset
measures the percentage of total asset financed by debt
C. Debt to Equity
measures the percentage of debt over equity
ability of the company to meet its long-term obligations
measures the degree of protection that the coop has for members' savings and share capital in the event of liquidation
availability of cash and cash equivalent
measures ability to service members' withdrawals and deposits on time
Measure the capacity of asset to generate income
D. Cost for volume of business
Measures efficiency in managing the cooperative's business
Comparison from one company to another
Comparison to a universe of coverage
Give me some types of ratios...
Financial Ratios

We have...
Asset Management Ratio
Debt Management Ratio
Utang ka?
The usefulness of these ratios depend on the needs of the users.
The end
First we have...
Operational Strength
Operational Strength
Full transcript