Check sibling questions
Accounts and Finance
Step 7 Ratio Analysis

 

Example 1

Suppose there are 2 Companies A and B

A earned profit of 10000 on a turnover of 100000

B earned a profit of 15000 on a turnover of 500000

 

Calculate Profit as a percentage of Sales of both Companies

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Which Company is better?

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Which is the ideal Profit/Sales ratio

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  Example 2

Suppose a Company earned profit in 2 years as follows

Particulars

2016

2017

Profit

8000

9000

Sales

100000

150000

  Has the Company’s performance in 2017 improved?

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 12 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.