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Ratio analysis

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I want to know whther there's any logic for which ratios are to be multplied with 100 in the ratio formulas and which are to be not?

Please Help friends !!

Replies (2)

There is really no compulsion. For example when you say current ratio is 2 it means current assets are 2 times or 200% of current liabilities. So,as far as your concept is good and you can explain the ratio,how you present does not matter. However conventionally turnover Ratios are written as "times",liquidity ratio is written as proportion (eg 1:1). Also where you get answer in decimal form which starts with 0,multiply it by 100,as it looks good. 

P.S. (just stating the obvious in case you dont know) Mathematically 200% can be written as 200/100 or 2.

Than You Sid !!


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