ABM - Balance Sheet management
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1. Net worth = A) Excess of assets over liabilities( for individual) B) Capital + Reserve (for company)
2. Networking Capital = A) Total of current asset-Total of current liability B) Difference b/w long term source and long term use
3. Debt Equity ratio (DER) = A) Term loan/Tangible networth B) Long term debt/Share holders equity C) Total liability/Share holders equity
4. DSCR = A) Total cash flow before interest/Total repayment obligation B) ( Net profit + Depriciation + Interest on long term liability )/ (Instalment + interest on long term liability)
5. Return on asset = Operating profit/(Total asset-intangible asset)
6. ICR(Interest coverage ratio )= EBIT / Interest on long term borrowings Where EBIT = Earning before interest and taxes
7.Total outside liabilities= current liability + long term liability
8. Total tangible asset = CA+ Fixed asset+ other non currrent asset
9. Tangible networth = Networth - intangible asset
10. Current Ratio = CA:CL
11. Quick Ratio = ( CA - Inventories )/ CL
12. Quick asset = CA - Inventory
13. Heads that come under current asset→
Inventory, Preliminary Expenses/prepaid expenses, Cash and bank balance, Sundry debtors/Bill reicivables, Investment in qouted securities such as Govt sec , FDR
14. Heads that come under liabilities ->
Sundry creditors/Bills payable, Installment of term loan payable in a year, prefrential capital, Provisions to paid in a year, WCTL( Working capital term loan )
