Expert Commerce Edge CBSE Ratio Analysis Calculator

Class 12 Accountancy - Complete Ratio Analysis as per CBSE Syllabus 2025-26

Enter Financial Data for Ratio Analysis

💧 Liquidity Ratios

Current Ratio

Current Ratio = Current Assets ÷ Current Liabilities

Current Assets: ₹

Current Liabilities: ₹

Current Ratio:

Quick Ratio (Acid-Test Ratio)

Quick Ratio = (Current Assets - Inventory) ÷ Current Liabilities

Current Assets: ₹

Inventory: ₹

Current Liabilities: ₹

Quick Ratio:

🏛️ Solvency Ratios

Debt to Equity Ratio

Debt to Equity = Total Debt ÷ Shareholders' Equity

Total Debt: ₹

Shareholders' Equity: ₹

Debt to Equity:

Total Assets to Debt Ratio

Total Assets to Debt = Total Assets ÷ Long-term Debt

Total Assets: ₹

Long-term Debt: ₹

Assets to Debt:

Proprietary Ratio

Proprietary Ratio = Shareholders' Funds ÷ Total Assets

Shareholders' Funds: ₹

Total Assets: ₹

Proprietary Ratio:

Interest Coverage Ratio

Interest Coverage = Net Profit before Interest & Tax ÷ Interest

Net Profit before Interest & Tax: ₹

Interest Expense: ₹

Interest Coverage:

Debt to Capital Employed Ratio

Debt to Capital = Long-term Debt ÷ Capital Employed

Long-term Debt: ₹

Capital Employed: ₹

Debt to Capital:

⚡ Activity Ratios

Inventory Turnover Ratio

Inventory Turnover = Cost of Goods Sold ÷ Average Inventory

Cost of Goods Sold: ₹

Average Inventory: ₹

Inventory Turnover:

Trade Receivables Turnover Ratio

Receivables Turnover = Net Credit Sales ÷ Avg Receivables

Net Credit Sales: ₹

Average Receivables: ₹

Receivables Turnover:

Trade Payables Turnover Ratio

Payables Turnover = Net Credit Purchases ÷ Avg Payables

Net Credit Purchases: ₹

Average Payables: ₹

Payables Turnover:

Fixed Assets Turnover Ratio

Fixed Asset Turnover = Net Sales ÷ Net Fixed Assets

Net Sales: ₹

Net Fixed Assets: ₹

Fixed Asset Turnover:

Net Assets Turnover Ratio

Net Asset Turnover = Net Sales ÷ Total Assets

Net Sales: ₹

Total Assets: ₹

Net Asset Turnover:

Working Capital Turnover Ratio

WC Turnover = Net Sales ÷ Working Capital

Net Sales: ₹

Working Capital: ₹

WC Turnover:

💰 Profitability Ratios

Gross Profit Ratio

Gross Profit % = (Gross Profit ÷ Net Sales) × 100

Gross Profit: ₹

Net Sales: ₹

Gross Profit %:

Operating Ratio

Operating Ratio = (COGS + Operating Expenses) ÷ Net Sales × 100

Cost of Goods Sold: ₹

Operating Expenses: ₹

Net Sales: ₹

Operating Ratio %:

Operating Profit Ratio

Operating Profit % = (Operating Profit ÷ Net Sales) × 100

Operating Profit: ₹

Net Sales: ₹

Operating Profit %:

Net Profit Ratio

Net Profit % = (Net Profit ÷ Net Sales) × 100

Net Profit: ₹

Net Sales: ₹

Net Profit %:

Return on Investment (ROI)

ROI = (Net Profit ÷ Capital Employed) × 100

Net Profit: ₹

Capital Employed: ₹

ROI %:

Ratio Analysis Results

Current Ratio

2.00:1

✓ Ideal ratio (2:1). Company has good short-term liquidity.

Quick Ratio

1.20:1

✓ Good liquidity without inventory.

Debt to Equity Ratio

1.50:1

⚠️ Moderate leverage. Acceptable for manufacturing.

Interest Coverage Ratio

4.5x

✓ Good coverage. Company can easily pay interest.

Profitability Analysis

Gross Profit %

25%

✓ Healthy gross margin.

Net Profit %

12%

✓ Good profitability after all expenses.

Return on Investment

15%

✓ Excellent return on capital employed.

Activity/Efficiency Analysis

Inventory Turnover

6.0x

✓ Good inventory management.

Receivables Turnover

8.0x

✓ Efficient collection from debtors.

Fixed Asset Turnover

2.5x

⚠️ Moderate utilization of fixed assets.

Overall Financial Health Summary

Based on the calculated ratios, the company shows:

✓ Strong liquidity position
✓ Good profitability margins
⚡ Moderate asset utilization efficiency
⚠️ Acceptable but could improve debt management

Recommendation: Continue current operations while focusing on improving asset turnover.

CBSE Class 12 Ratio Analysis Guide

📘 CBSE Syllabus Importance

Weightage: Ratio Analysis carries 5-6 marks in CBSE Class 12 Accountancy board exams.

Key Areas: Calculation, Interpretation, and Comparative Analysis of ratios.

Common Questions: Usually 1 Short answer question (4 marks) + 1 Mcq (1 mark).

🎯 Ideal Ratio Values (CBSE Standards)

Ratio	Ideal Value	Interpretation	Formula to Remember
Current Ratio	2:1	Short-term solvency	Current Assets ÷ Current Liabilities
Quick Ratio	1:1	Immediate liquidity	(CA - Inventory) ÷ CL
Debt to Equity	2:1	Long-term solvency	Total Debt ÷ Shareholders' Equity
Interest Coverage	3x	Interest paying capacity	EBIT ÷ Interest Expense
Gross Profit %	20-30%	Production efficiency	(GP ÷ Net Sales) × 100
Net Profit %	10-15%	Overall profitability	(NP ÷ Net Sales) × 100

📝 Exam Writing Tips

1. Always show working: Even if formula is wrong, method marks are awarded.

2. Write interpretation: "A current ratio of 2:1 indicates that for every ₹1 of current liabilities, the company has ₹2 of current assets."

3. Comparative analysis: Compare with previous year or industry average.

4. Round off properly: Ratios should be shown as X:1 or percentage with 2 decimals.

5. Mention assumptions: If any data is assumed, clearly state it.

📚 Common Mistakes to Avoid

❌ Using opening inventory instead of average inventory
❌ Including non-operating income in operating profit
❌ Forgetting to multiply by 100 for percentage ratios
❌ Using gross sales instead of net sales
❌ Confusing long-term debt with total debt
❌ Not considering prepaid expenses in current assets

🧠 Memory Tricks

For Liquidity Ratios: "Current is Complete, Quick is Quick (minus inventory)"

For Profitability: "Gross is before expenses, Net is after everything"

For Turnover Ratios: "Sales over Asset = How well asset generates sales"