Free Commerce Resource

Accountancy Ratio Formulas Class 12

Best for: Commerce students searching ratio formulas and interpretation support before tests.

Accounting ratios become easier when students revise formula, meaning and interpretation together. This page gives a quick formula route and connects students with free ratio calculators for checking practice answers.

Fastest useful start

Never write only the ratio value. Add one interpretation line where required because ratios are used to judge liquidity, solvency, efficiency or profitability.

Liquidity ratios

  • Current Ratio = Current Assets / Current Liabilities.
  • Quick Ratio = Quick Assets / Current Liabilities.

Solvency and profitability ratios

  • Debt Equity Ratio = Debt / Equity.
  • Gross Profit Ratio = Gross Profit / Net Sales × 100.
  • Net Profit Ratio = Net Profit / Net Sales × 100.
  • Operating Ratio = Operating Cost / Net Sales × 100.

How to avoid mistakes

  • Check whether the item belongs to current assets or quick assets.
  • Do not mix gross profit and net profit.
  • Write percentage sign for percentage ratios.
  • Interpret whether the result shows liquidity, profitability or solvency.
  • Use calculators only after solving manually.

Open the useful pages

Quick answers

Which Accountancy ratio formulas should I revise first?

Start with current ratio, quick ratio, debt-equity ratio, gross profit ratio and net profit ratio.

Is formula memorisation enough?

No. Students should also know what the ratio tells about the business.

Use this with the main website

This page is a free study route, not an official board publication. For more learning support, open Study Material, CBSE Notes, GSEB Economics PDFs, Commerce Tools and Commerce Games.