#3 Ratio Analysis [Solvency Ratios] ~ Concept behind formation of a Formula

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Described the concept, reason and logic behind formation of different formulas of analysis of financial statements. I have discussed the core concept of contents used in the following formulas:
1. Debt Equity Ratio
2. Total Assets to Debt Ratio
3. Proprietary Ratio
4. Interest Coverage Ratio (not relevant for Class 12)
5. Debt Service Ratio (not relevant for Class 12)
6. Capital Gearing Ratio (not relevant for Class 12)
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[@sanjeevrana5575]

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[@bishal.dey26]

After watching this video, i understood the real concept behind percentage.Thank you Sir

[@FinanceAcademy7799]

Excellent video Naresh sir. Itne foreign teachers ke video dekhe lekin ratios ka true purpose clear nhi hua. Aapki video ek baar dekhne se samajh aagaya.

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Hope so you made a Vedio on new changes on format of cash flow statement

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[@tulsiprasadsapkota5845]

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[@sangamrani8816]

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[@kaminikumari7368]

Capital gearing ratio =equity capital + reserve surplus\ perf. Share capital;debenture hoga sir kya

[@Glimmer0604]

Thank you sir

[@aditiyadav9009]

Thnqq so much sirr this video helped me alot

[@mrdavid3163]

Hi

[@preetyprasadsharma6237]

Sir , module pe toh Debt service ratio ka formula pe Net profit before Interest and tax hai aur aapnay net profit after tax but before interest kaha ....hum exam pe kaun sa karey. ..plz reply sir

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Sir there are only 3 lecture for ratio ch please tell has ch been completed??

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[@indiangamelar3351]

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[@maheshhawaldar6673]

thanks for good explanation of each formula, just one thing the capital gearing ratio when searched online shows upside down
equity fund / fixed return bearing debts ?

[@bhaumikthakkar531]

Thank you sir providing this lecture.
What is the meaning of Capital employed ??
Please explain sir or anyone .

[@simransharma6506]

It means total kitna paisa hum logo ka hai business mein including our capital, i.e., shares and all and outside capital including debentures etc.

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[@prabhatmishra687]

in Calculating DSCR in denominator side we are adding inetrest to installment however installments contains both Principle and interest . Doesnt it make interest twice in the denominator side?

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[@mdiqbalmdiqbal6628]

A Ltd has current ratio of 3.5:1 and acid test ratio of 2:1 if the inventory is 30000 find out its current assets and total current liabilities

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Sir if we divided C .A BY C.L THEN in any ans WHY WE WRITE 1 or 2 after 2.1 or after 3 .2

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[@vivekshukla4449]

In DSCR net income use means we will not use taxes interest and div

[@karansingla9474]

sir, why fictiotious assets are subtractcted from all over liabilities to get capital employed...

[@muskanagarwal2480]

Because fictious asset is in the form of loss which sould be deducted from shareholders fund ....because losses aur subtracted and profit is aaded to capital(shareholder's funf)

[@pragatimishra2921]

Sir ap ne eske phle vedio me profitability k 5 formule h btaye h . 4 us vedio me explain kiye or ek next vedio me bole the to vo formula?

[@shubhu5751]

Sir doubt: where do we show Fictitious assets in Balance sheet under companies act 2013?

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Sir why depreciation is not added in icr and dscr

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My mind : sarkar ta saddi aapni aa

[@krishnasinha2423]

Are these for part 3 students ??

[@AAO.SAHILSAINI]

Sir, Equity Fund ke liye Fictitious Assets Deduct hogi ya nhi?

[@abineetsharma877]

Hogi

[@dpsmanjhaul1934]

umda

[@pratikshamahajan411]

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[@dimplesoni6151]

sir, ye formula sahi h fir aapke hisab se ,
total liability = C.L. + capital employed.
pls comment sir

[@sanyavadhera2350]

yes this is correct

[@dimplesoni6151]

@@sanyavadhera2350 thanks

[@Jawadul5]

How to treat profit and loss account(under Liabilities side) in debt-equity ratio? Help if possible.

[@arp312]

Equity means equity share capital+reserve and surplus it includes p/L cr balance+ pref capital

[@rishabhkuriyal9894]

Sir,Mujhe capital employed me bhot problem h kyuki isme hrr chapter me nya formula ajata h plzz sir agr ap ek video ispe bhi bna dijye

[@indiangk7499]

Class purchase kaha se kare

[@sohamsarkar8588]

Sir, for Debt Service Coverage Ratio, can we use: EBITDA-Capex/Interest=Principal ?

[@mohammeddanish4946]

Sir formula no. 6 mere book meh just ulta diya hai

[@rajubayalkoti3607]

😍😍😍😍

[@c22manas]

If I consider Total Debt = (Total liabilities - Total Current Liabilities), is that the right understanding?

[@arp312]

Total liability - Total current liability= capital employed.

[@nikitashinde8795]

🤗👍👍👍👍👍