🔰 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.
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.
➖ 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 📣
Biggest Giveaway in History 🎁
Lucky students will win Exciting Rewards 🥳
🗓 31st Aug
🕕 6.00pm
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Biggest Giveaway in History 🎁
Lucky students will win Exciting Rewards 🥳
🗓 31st Aug
🕕 6.00pm
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✍️ Meaning of Partnership Deed ✍️
Partnership Deed is a partnership agreement between the partners of the firm which outlines the terms and conditions of the partnership between the partners. The purpose of a partnership deed is to provide clear understanding of the roles of each partner, which ensures smooth running of the operations of the firm.
✍️ Registration of Partnership Deed ✍️
All the rights and responsibilities of each member are recorded in a document known as a Partnership Deed. This deed can be oral or written; however, an oral agreement is of no use when the firm has to deal with tax.
A few essential characteristics of a partnership deed are :
➖ The name of the firm.
➖ Name and addresses of the partners.
➖ Nature of the business.
➖ The term or duration of the partnership.
➖ The amount of capital to be contributed by each partner.
➖ The drawings that can be made by each partner.
➖ The interest to be allowed on capital and charged on drawings.
➖ Rights of partners.
➖ Duties of partners.
➖ Remuneration to partners.
➖ The method used for calculating goodwill.
➖ Profit and loss sharing ratio.
Partnership Deed is a partnership agreement between the partners of the firm which outlines the terms and conditions of the partnership between the partners. The purpose of a partnership deed is to provide clear understanding of the roles of each partner, which ensures smooth running of the operations of the firm.
✍️ Registration of Partnership Deed ✍️
All the rights and responsibilities of each member are recorded in a document known as a Partnership Deed. This deed can be oral or written; however, an oral agreement is of no use when the firm has to deal with tax.
A few essential characteristics of a partnership deed are :
➖ The name of the firm.
➖ Name and addresses of the partners.
➖ Nature of the business.
➖ The term or duration of the partnership.
➖ The amount of capital to be contributed by each partner.
➖ The drawings that can be made by each partner.
➖ The interest to be allowed on capital and charged on drawings.
➖ Rights of partners.
➖ Duties of partners.
➖ Remuneration to partners.
➖ The method used for calculating goodwill.
➖ Profit and loss sharing ratio.