Modules for Investors
Fundamental Analysis
The use of Fundamental Analysis
3. Fundamental analysis vs technical analysis
4. Annual Report: The Backbone of Fundamental Analysis
Should I do fundamental analysis of a stock?
5. Reading profit and loss statements - terms and meaning
6. How to Analyze a Profit and Loss (P&L) Statements
3 important P&L ratios
7. How to Read & Understand a Balance Sheet
8. Analysing the balance sheet - key ratios, calculations
3 important balance sheet ratios
9. Analysing Cash Flow Statements - Basics, Format & Calculations
10. How Fundamental Analysis can Help You Improve your Finances
3 important cash flow ratios
What You Should Know About Glossary of 20 Numbers and Ratios
Translate the power of knowledge into action. Open Free* Demat Account
Modules for Investors
Fundamental Analysis
- 1. Introduction to Fundamental Analysis
- 2. A Perfect Guide to Fundamental Analysis
-
The use of Fundamental Analysis
- 3. Fundamental analysis vs technical analysis
- 4. Annual Report: The Backbone of Fundamental Analysis
-
Should I do fundamental analysis of a stock?
- 5. Reading profit and loss statements - terms and meaning
- 6. How to Analyze a Profit and Loss (P&L) Statements
-
3 important P&L ratios
- 7. How to Read & Understand a Balance Sheet
- 8. Analysing the balance sheet - key ratios, calculations
-
3 important balance sheet ratios
- 9. Analysing Cash Flow Statements - Basics, Format & Calculations
- 10. How Fundamental Analysis can Help You Improve your Finances
-
3 important cash flow ratios
- What You Should Know About Glossary of 20 Numbers and Ratios
Translate the power of knowledge into action. Open Free* Demat Account
3 important P&L ratios
01:23 Mins Read
There are many ratios that you can discern from the P&L statement of a company. Here are three important ratios.
Transcript
3 Important P&L Ratios Let’s take a quick look at 3 important profit and loss accounting ratios. First, we have the gross profit ratio. This ratio is calculated as follows: gross profit, divided by net sales, multiplied by 100 It reflects the efficiency with which a firm produces or delivers its products or services. Then, we have the net profit ratio. This ratio is calculated as follows: net profit, divided by net sales, multiplied by 100 It measures the overall profitability of the business Lastly, let’s look at the operating ratio. It is the sum of the cost of goods sold and the operating expenses, divided by net sales, and multiplied by 100. It is used to determine the efficiency of a company's management. These ratios form an important part of fundamental analysis. Now, it’s time to get to know the balance sheet of a company a little better. Head to the next chapter of Smart Money to know more.
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