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Anirudh Gupta

CA Aspirant|Content ... • 8h

Daily(irregular 😅) dose of financial ratios by Anirudh Gupta Lets learn these two ratios 1.Capital turnover ratio: =Sales or Cost of goods sold/Capital employed Capital employed=Shareholders funds+ Non-current liabilities Purpose: -To understand, how many rupees of revenue are generated for every ₹1 of capital invested in the business? -Tests the company usage of assets to generate sales. 2. Ebit margin =Ebit or operating profit /sales Purpose: -It measures the profit a company earns from its operations, before deducting interest and taxes, for every rupee of sales generated. -To judge the company’s performance. These two ratios combined will result in a new ratio ,which we will discuss in the next post. It's actually a dead easy guess.Find it out! Stay tuned. Will come up with more posts which are not just limited to financial ratios.

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