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Formula sheet/NISM Series XV: Research Analyst/Company Analysis - Financial Analysis
[ COMPANY ANALYSIS - FINANCIAL ANALYSIS ]

Liquidity Ratios

Current Ratio=Current AssetsCurrent Liabilities\text{Current Ratio} = \dfrac{\text{Current Assets}}{\text{Current Liabilities}}
Quick Ratio(Acid−Test)=(Current Assets−Inventories)/Current Liabilities\text{Quick Ratio} (Acid-Test) = (\text{Current Assets} - Inventories) / \text{Current Liabilities}
Variables

Quick ratio strips out illiquid inventories to assess instant cash-readiness against immediate liabilities.

Worked example
Solvency & Coverage Ratios

Delta Infra Ltd has Total Debt of Rs 3,600 Cr, Net Worth of Rs 2,400 Cr, EBIT of Rs 480 Cr, and Annual Finance Interest Cost of Rs 320 Cr. Calculate the Debt-to-Equity (D/E) Ratio and Interest Coverage Ratio. Evaluate financial risk.