As an accounting student, you have several forms of assignments to submit. Some of them are easy while others make your head dizzy. For that reason, there are so many accounting assignment help services. For students who feel unable to perform their tasks on time, these services are a blessing in disguise. Moreover, there are so many forms of accounting assignments. Those are profit and loss, ledger, LIFO, FIFO, trial balance, income statement, balance sheets and ratio analysis. If you find ratio analysis confusing, then this is the right article for you. All of its types and some tips are discussed here for your assignment help. So without further delay, get into this.
What is Ratio Analysis Accounting Assignment?
Before getting into its types, learn the basic of it. Ratio analysis is a study of a company financial performance. That is why it includes several balance sheets, income statements etc. It helps to know several trends in the market and investment opportunities. By knowing these, a company can perform competitive tactics. This kind of assignment makes the individual market ready. It aids the student to improve their understanding of financial trends and get to know an organisation’s performance. There are several types of ratio analysis and various ways to do that. Those are discussed below:
Market Ratio
It helps you to predict how much an investor will earn after investing. Similarly, you will know whether the current trade price of the stock is its true value or not. By knowing its value, you can tell whether it should be purchased or not. It is essential to do it correctly, below are some ways how to do that-
- Know the company’s earning ratio or its net income. By this, you will know whether investing in it will be profitable.
- Check whether the stock price is over or undervalued compared to the past or other companies.
- Check the company cash flow on a per-share basis.
- Compare the organisation equity with their number of shares.
Debt Ratio
This assignment helps the student understand the financial stability of the company. It helps to measure the debt level of an organisation took for their operation. By knowing this, you can tell whether investing in a particular firm is risky or safe. Various companies have various strategies, needs and growth rates. In most cases, students apply one rule to every aspect and it leads to the wrong conclusion. So given below are certain things to keep in mind-
- Check the difference between the total value of assets and the amount of debts. It is applied only to personal or small business owners while taking loans.
- Different companies have different needs and growth rates, so consider those before operating.
- A good debt ratio depends on the nature of the industry and its performance. Therefore, consider the yearly performance, not short-term ones.
Liquidity Ratio
It is also like the debt ratio. The difference is it focuses on the ability to pay off short-term debt. Through this, students can analyse the possibility of whether a firm can survive long or not. In addition, you can tell whether the company is safe or not. It shows the company can pay off its current debt with its assets. It is used by banks, creditors etc. Below are some tips to keep in mind-
- The simple way to check the liquidity ratio is to check the company balance sheet. Current assets and current liabilities are there to analyse.
- If you want to conduct better research, consider the company’s cash and market security.
- Before relying on the balance sheet, check whether it is the recent one. Because in some cases, due to seasonal influences, it changes.
Activity Ratio
It helps to know how easily a company can turn its assets into cash. Here students can check the level of investment done in an asset and how it can pay off. It is also known as the efficiency ratio. Here you have to carefully analyse how much was invented, fixed goods and receivable accounts etc. Here are some simple things to keep in mind before getting it done-
- Measure how the inventory stock is used or replaced. It helps while comparing similar companies.
- Test how effectively a company can provide facilities to its customers and at the same time pay their debt amount within time.
- Check the sales which took place in the company business and their net asset.
Profitability Ratio
It helps to analyse whether a firm can earn profits from its regular commercial task or not. If the profitability ratio is higher for company than its competitors, then you will know it is the perfect place to invest. Students need to do this task to understand how well a firm makes money and is profitable for shareholders. Here are some things to keep in mind-
- The easiest way to determine this is by dividing the gross profit figure by total net sales.
- It is essential to check how much money the organisation brings in compared to how much it takes to run it.
- Also, consider the net sales related to net profit after paying the tax.
These are the types of ratio analysis and how to do that effectively. There are several other types of assignments for accounting students. All these may seem overwhelming, but once you get the gist of it, you will do that without any issues. Accounting is a vast field and there are so many things to learn from it. Moreover, you have to be good at numerals. As an accounting student, you have to face various challenges. There are heavier workloads, so much competition, stress and many more. While dealing with each of these, it becomes impossible for an individual to do their academic task. They feel a lack of motivation and suffer to submit work on time. Sometimes they feel embarrassed to seek help when they lack academic skills.
If you are one of them, then ask your professors and classmates to help you. If there are still some issues you can not overcome, seek accounting assignment help from online experts for guidance. They will aid you in writing a well-written paper and understanding the topic more.