1. FINANCIAL RATIOS USED TO MEASURE PERFORMANCE OF BUSINESS TO INDUSTRY OR ESTABLISHED RESULT – IT IS IRRELEVANT IF ANALYSED ON IT’S OWN – OBJECTIVE LOOK – ENVIRONMENT, CLIMATE, ECONOMY ETC USED BY CREDITORS, OWNERS, STOCK HOLDERS, MANAGEMENT – TRICKS TO MAKE RATIOS LOOK GOOD

2. RATIOS CURRENT RATIO : RATIO BETWEEN CURRENT ASSETS Vs CURRENT LIABILITIES – 2:1 ACID TEST RATIO : CASH+CR CARD RECEIVABLES+A/C RECEIVABLES/TOTAL CURRENT LIABILITIES – HIGHER BETTER – CLOSER TO 1 CREDIT CARD RECEIVABLES RATIO : AVRG CR CARD RECEIVABLES/TOTAL CREDIT REVENUE CREDIT CARD RECEIVABLES RATIO : AVRG CR CARD RECEIVABLES/TOTAL SALES REVENUE ACC RECEIVABLE RATIO : AVG ACC REC/ACC REC CR REVENUE

3. RATIOS PROFITABILITY RATIOS : 1. RETURN ON ASSETS: NET INCOME/TOT AVE ASSETS 2. NET INCOME TO REVENUE: NET INCOME/SALES REVENUE 3. EARNINGS PER SHARE: NET INCOME/AVE NUMBER SHARES( (SHARES JAN +SHARES DEC)/2)

4. RATIOS TURNOVER RATIOS: 1.INVENTORY TURNOVER – COST OF SALES PRD/AVE INVENTORY PRD 2.WORKING CAPITAL TURNOVER – TOTAL SALES REV/AVE WORKING CAPITAL

5. RATIOS OPERATING RATIOS 1.LABOUR COST % 2.FOOD & BEV COST % 3.AVE CHECK 4.REVPASH 5.AVE RATE 6.REV PAR