## Principles of Accounting: Introduction to Accounting ratios

By |2022-09-15T12:33:02+02:00January 24th, 2023|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounts Notes: Introduction to Accounting Ratios

#### Introduction to ratios in Accounting

• Often in business numbers given in isolation are difficult to interpret
• For example Business A makes a profit of \$10 000 while Business B makes a profit of \$10 million
• It would be difficult to know which business better between the two
• Those new […]
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## Principles of Accounting: Profitability Ratios

By |2022-09-15T12:33:02+02:00January 24th, 2023|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounts Notes: Profitability Ratios

• So we have already introduced you to accounting ratios
• These ratios include a group of ratios that are known as profitability ratios
• Such ratios measure how well a business performed in profit terms in a given period
• At this level you are required to know how to calculate three profitability […]
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## Principles of Accounting: Introduction to Liquidity Ratios

By |2022-09-15T12:33:01+02:00January 24th, 2023|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Introduction to Liquidity Ratios

• Liquidity is a measure of how well a business can meet its short term obligations as and when they fall due
• It is usually expressed in terms of how well the entity/business in question can convert its assets into cash
• Short term obligations include amounts owed to creditors, bank […]
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## Principles of Accounting: Current Asset Ratio

By |2022-09-15T12:33:00+02:00January 24th, 2023|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Introduction to Liquidity Ratios: Current Asset Ratio

• As pointed out in the introduction
• One of the liquidity ratios that you need to be familiar with is the Current Asset Ratio
• Like all liquidity ratios it measures how well a business will be able to settle its short term obligations as and when […]
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## Principles of Accounting: Acid Test Ratio / Quick Asset Ratio

By |2022-09-15T12:33:00+02:00January 24th, 2023|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Introduction to Liquidity Ratios: Acid Test Ratio / Quick Asset Ratio

• As pointed out in our discussion of the Current Asset Ratio
• Including stock when calculating stock might not be desirable
• This is because it might not always be easy to turn the asset of stock/inventory into liquid cash so as to […]
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## Principles of Accounting: Rate of inventory turnover

By |2022-09-15T12:33:00+02:00January 24th, 2023|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Introduction to Liquidity Ratios: Rate of inventory turnover

• Proprietors often want to know how “well” their business is doing
• Besides such measures as profitability
• one way of estimating liquidity is through the rate of inventory turnover ratio
• The ratio estimates the number of times inventory is sold or used in a given financial period […]
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## Cambrige Notes: Principles of Accounting: Introduction to Accounting ratios

By |2022-09-15T12:31:50+02:00January 24th, 2023|Cambridge O Level/ IGSCE Accounts Notes, Notes, Ordinary Level Notes|

Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Introduction to Accounting Ratios

#### Introduction to ratios in Accounting

• Often in business numbers given in isolation are difficult to interpret
• For example Business A makes a profit of \$10 000 while Business B makes a profit of \$10 million
• It would be difficult to know which business better between the two
• Those […]
Comments Off on Cambrige Notes: Principles of Accounting: Introduction to Accounting ratios

## Cambrige Notes: Principles of Accounting: Profitability Ratios

By |2022-09-15T12:31:51+02:00January 24th, 2023|Cambridge O Level/ IGSCE Accounts Notes, Notes, Ordinary Level Notes|

Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Profitability Ratios

• So we have already introduced you to accounting ratios
• These ratios include a group of ratios that are known as profitability ratios
• Such ratios measure how well a business performed in profit terms in a given period
• At this level you are required to know how to calculate three […]
Comments Off on Cambrige Notes: Principles of Accounting: Profitability Ratios

## Cambrige Notes: Principles of Accounting: Introduction to Liquidity Ratios

By |2022-09-15T12:31:51+02:00January 24th, 2023|Cambridge O Level/ IGSCE Accounts Notes, Notes, Ordinary Level Notes|

Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Introduction to Liquidity Ratios

• Liquidity is a measure of how well a business can meet its short term obligations as and when they fall due
• It is usually expressed in terms of how well the entity/business in question can convert its assets into cash
• Short term obligations include amounts owed to […]
Comments Off on Cambrige Notes: Principles of Accounting: Introduction to Liquidity Ratios

## Cambrige Notes: Principles of Accounting: Current Asset Ratio

By |2022-09-15T12:31:51+02:00January 24th, 2023|Cambridge O Level/ IGSCE Accounts Notes, Notes, Ordinary Level Notes|

Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Introduction to Liquidity Ratios: Current Asset Ratio

• As pointed out in the introduction
• One of the liquidity ratios that you need to be familiar with is the Current Asset Ratio
• Like all liquidity ratios it measures how well a business will be able to settle its short term obligations as […]
Comments Off on Cambrige Notes: Principles of Accounting: Current Asset Ratio