7.10. Faculty should explain the meaning of each item shown in this visual aid
with simple examples.
Visual Aid - 11: Ratios
Ratios
ó Solvency
ó Liquidity
ó Working capital
ó Gearing
ó Sources and uses of funds
ó Current ratio
ó Quick ratio
ó Debt equity ratio7.11. Faculty should explain how to use ratios with two or three examples for
each ratio. Ensure that the participants are understanding implications of
the outcome.
7.12. Also explain that there are different stake holders to Balance sheet,
and that ratios can be used and analysed from the viewpoints of different
stake holders. Highlight how the out come of the ratio analysis can be
used?
7.13. Ask the participants to make their own ratio analysis during the group
activity.
Visual Aid - 12: Analysis of Profit
Analysis of Profit
- Gross Profit
- Operating Profit
- Profit before Tax
- Net Profit after Tax
- Return on Capital employed
- Return on SHF
- Stability
- Limitation