                     # Capitalization Ratio | Formula | Example | Calculation Explanation

Capitalization Ratio | Formula | Example | Calculation Explanation

The ratios comprising this category are calculated with reference to sales or cost of sales and expressed in number of times, ., rate of turning over or rotation. The activity ratios indicate the briskness with which the business is being carried on. Therefore they are also called 8766 velocities 8767 .

## Reading the Balance Sheet | Analyze a Balance Sheet with Ratios

The accounts receivable ratio evaluates the efficiency of revenue collection. It measures the number of times a company collects its average accounts receivable over a given period.

### Debt Ratio = Total Equity / Total Assets | Статьи

Let us now calculate the Current Ratios for Colgate.

#### Free Asset Ratio – FAR Definition

The ratio of common stockholders' equity (including earned surplus) to total capital of the business shows how much of the total capitalization actually comes from the owners.

It is the ratio of profit made from operating sources to the sales. Usually shown as a percentage. It shows the operational efficiency of the firm and is a measure of the management 8767 s efficiency in running the routine operations of the firm.

Identifying the average operating assets or AOA associated with a company during a specific accounting period is very important to the business process. This type of calculation makes it easier to determine if the business is making efficient use of its resources in order to generate revenue. Fortunately, the process used in calculating AOA is very simple, making it easy to manage the calculation with relatively little effort.

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Investors analyze these financial ratios to determine the long-term security, short-term efficiency, and The ROA ratio is a company's net, after-tax income divided by its total assets. An important point to note is since banks are highly leveraged...