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💰 Measures of Money Supply 💰

RBI uses four measures of money supply denoted as M1, M2, M3 & M4.

M1 = Currency notes and coins in circulation with public (but not those held by banks) + Net demand deposits with the commercial banks + Other deposits.

M2 = M1 + Deposits with post-office savings banks.

M3 = M1 + Fixed deposits with banks.

M4 = M3 + All post-office savings bank deposits.
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🔰 Methods of Expressing Accounting Ratios 🔰

1. Proportion Ratio: In this form, the relationship between the two items is directly expressed in proportion. For e.g. Current Ratio explains the relationship between Current Assets and Current Liabilities.

2. Times: In this form, the ratio is expressed in a number of times, a particular item in comparison to other items.

3. Percentage: In this form, the relationship between the two items is expressed in percentage. For e.g. Net Profit expresses the relationship between Net profit and Revenue from Operations.
📍Meaning of Ratio Analysis📍

➖ Analysis of financial statements with the help of ratio can be termed as ratio analysis.
➖ Examination and interpretation of the relationship between numerical figures.

📍Objectives of Ratio Analysis📍

➖ Provides analysis of profitability, liquidity and the solvency of the business.
➖ Traces the area which seeks more attention.
➖ Helps in making estimates.
➖ Supports in comparing the performance with best industry standards.

📍Advantages of Ratio Analysis📍

➖ Assists in comparative studies.
➖ Simplifies complex figures.
➖ Supports financial analysis.
➖ Helpful in forecasting.
➖ Helps in judging the operating efficiency of a business.
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📣 Biggest Announcement for CA Aspirants 📣

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Difference Between Dealer and Distributor
Fayol and Taylor’s Theories of Management
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Sometimes I feel..

Agar maine direct 11th me admission liya hota to meri zindagi ke 10 saal bach gye hote 😌