Andrew Roberts
Article Summary 3
February 17, 2013

The article, “The Sharpe Ratio and the Information Ratio”, by Deborah Kidd is about the original risk-adjusted performance measure and they are Sharpe ratio and the Information Ratio. William Sharpe designed the first performance metric to insolate excess return per unit of total risk taken. The Sharpe ratio shows whether a portfolio's returns are due to smart investment decisions or a result of excess risk. The Sharpe ratio measure dividends average portfolio excess return over the sample period by the standard deviation of returns over that period. It measures the reward to volatility trade-off. The Information Ratio is a ratio of portfolio returns above the returns of a benchmark to the volatility of those returns. The information ratio divides the alpha of the portfolio by the nonsystematic risk of the portfolio. It measures abnormal return per unit of risk that in principle could be diversified away by holding a market index portfolio. There are two key points that the author was communicating to its’ readers. The first key point relates to the advantages and disadvantages of the Shape ratio. The second key point relates to the advantages and disadvantages of the Information Ratio.

The first key point is the advantages and disadvantages of the Sharpe ratio. A disadvantage of the Sharpe is that it is expressed as a raw number and the higher the Sharpe ratio is the better. Another disadvantage is that the Sharpe ratio only uses standard deviation when calculating the risk. So it would be awkward when calculating the Ratio for asymmetric returns. Another disadvantages of Sharpe’s ratio is that Sharpe ratio should not be used as a measure to compare portfolios because when there is a negative Sharpe ratio the risk increases. An advantage of the Sharpe ratio is that it can be easily calculated without needing any additional data regarding the asset’s profitability. Another advantage is that people can...

...Ratio decidendi and obiter dicta
Learning objectives
At the end of this module, you will be able to:
* distinguish between ratio decidendi and obiter dicta.
* apply well-established rules to identify the ratio decidendi in a decision.
This module is intended as a useful exercise in revision. If you are certain that you understand how to discover the ratio in an opinion, you should skim lightly over this material.
What is the ratio decidendi?
As you probably recall from your studies, the term ratio decidendi is a Latin phrase which means the "the reason for deciding". What exactly does this mean? In simple terms, a ratio is a ruling on a point of law. However, exactly what point of law has been decided depends on the facts of the case.
| The importance of material facts As Goodhart A L (1891–1978) pointed out long ago in the 1930s, the ratio is in pratical terms inseparable from the material facts. Goodhart observed that it "is by his choice of material facts that the judge creates law". By this Goodhart meant that the court's decision as to which facts are material or non-material is highly subjective, yet it is this inital decision which determines a higher or lower level of generality for the ratio. Goodhart's reformulation of the concept of the ratio was the subject of heated debate, particularly in the 1950s....

...Ratio Analysis
Ratio analysis is basically used to understanding the financial health of a business entity. With the help of ratios we can easily calculate from current year performance of the companies and are then compared to previous years. Ratio analysis conducts a quantitative analysis of information in a company’s financial statements. These Ratios are most commonly used in banking sector can be divided into five main categories
Liquidity Ratios
Leverage Ratios
Profitability Ratios
Activity Ratios
Market Ratios
A) Liquidity Ratios
Liquidity Ratios are used to determine a company's ability to meet its short terms obligations.
These include;
1) Current Ratio
2) Acid Test Ratio
3) Working capital
Current Ratio
What Does Current Ratio Mean?
A liquidity ratio that measures a company's ability to pay short-term obligations. Also known as "liquidity ratio", "cash asset ratio" and "cash ratio".
OR
It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities.
Formula = Current Assets /...

...Ratio Analysis Memo
July 9, 2012
Memo To:
From:
Date: July 9, 2012
RE: Kudler Fine Foods ratio analysis
One of the things that we will be going over is some of the ratios for Kudler Fine Foods through Liquidity, Profitability, and solvency ratios. We will look into some of the finding that were found through these ratios and discuss them. One of the things that we found was where Kudler Fine Foods’ position is with these ratios. The first area that we look at is profitability.
Profitability Ratios:
When looking through the profits of the company through the balance sheets we will look at a couple of areas. The first area that we will look into is the asset turnover of the company. The beginning assets started in at $1,971,000. When you take that by the total assets of $2,675,250 you get the turnover margin which is 4.04.
Net Sales___ = Asset Turnover $10,796,200 = 4.04
Total Assets $2,675,250
Next area we see is the profit margin. You see through the balance sheet that Kudler Fine foods over the board did pretty good when you look at it from a profit stand point. The way we calculated the profit margin was Net Income over sales and this was the information that we got:
Net Income = Profit Margin $668,950__ = .06
Net Sales $10,796,200
Looking into the return on assets it was...

...902.00 compared with $15724.00 in 2012, followed by $14613.00 in 2011. Qantas seen a relatively flat in the revenue.
Gross profit in 2013 is $4315.0 with $4181.0 in 2012, followed by $3939.0 in 2011.
Net income in the consecutive three years are 5, -245, 250. There is an dramatic fluctuation appeared.
Ratio analysis
Year/ratio
2011
2012
2013
Industry average
Current ratio
0.90
0.77
0.82
Quick ratio
0.78
0.65
0.70
Gross profit ratio
55.6
51.7
54.6
Receivable turnover ratio
13.59
13.95
12.49
Inventory turnover ratio
18.45
19.25
19.51
Net profit ratio
1.74
-1.64
0.03
Debt to equity ratio
0.89
0.92
0.88
Asset turnover ratio
0.70
0.71
0.77
Current ratio is always larger than quick ratio, it may because that inventory is overstated. Inventory turnover ratio has a relatively slight rise , it also can be an indicator for the overstated inventory.
As per the current ratio, overstating inventory allows qantas to avoid booking expenses and reduces the cost of goods sold. It could also indicate obsolete stock problems.
Ratio
Explanation
Account
Key assertion
Explanation
Current ratio
The change in current ratio compared with the previous year, supports the idea that...

...[pic]
Basics of Economics
Submitted to:
Ms. Deepa Bhaskaran
Submitted By:
Sahil Bansal
Venkat Batra
Saurabh Satija
Ravikant Gupta
NANO CASE
Q-1 Identify target market for nano ?
Ans- The target market for nano would be
The group of people that belongs th the lower-middle class that earlier could not have thought of a car .
Higher-midle class group as well who already owe a car but want to or might be interested in buying another car but cant afford other expensive car .
The group of people who would certainly interested into having a compact car .
Q-2 What all factors should be taken in a account while identifying the demand for nano cars in malaysia ?
Ans-The factors that should be taken into account while identifying the demand for nano car in
malaysia are as follows :-
PRICE-price should be fixed according to the income level of the majority of the population in malaysia .
PLACE-which would be the preferable place to hit for profitable results .
TASTE AND PREFERANCES-considering the taste and preferences of the majorityb of the people in malaysia .
COMPETITION IN MARKET-analysing the market well to find out if there z any competition .
PREFERENCE OF PETROL OVER DIESEL OR VICE-VERSA-to check what the...

...-------------------------------------------------
Assignment 2012/2013 – Semester 2
-------------------------------------------------
B. Com (Major in Banking and Finance) – Year III
-------------------------------------------------
Ratio Analysis Report
-------------------------------------------------
Student: Kevin Galea 205891 (M)
-------------------------------------------------
Lecturer: Dr. Emanuel Camilleri
Introduction
The purpose of the following report is to aid Build-It Ltd in planning the direction that the company may want to go over the next few years. The report entails a financial analysis which will give the directors an understanding of how well the company is performing.
Figures were obtained from comparative balance sheets and profit and loss statements from the last two years. This information enabled the development of percentage and ratio analysis (see appendices), which was then used to create the report.
Profitability Ratios Analysis
Profitability refers to the ability to make profit from the company’s business activities. It shows how efficiently the management can make profit by using all the resources available.
A very important ratio is the Return on Capital Employed (ROCE). This shows the profit made in relation to the resources employed. Build-It Ltd’s ROCE ratios for 2011 and 2012 were calculated as 22.12% and 25.64% respectively. This...

...Liquidity Ratios: Current Ratio = Current Assets/Current Liabilities
Efficiency Ratios Asset Turnover Ratio = Sales Revenue/ (Fixed Assets + Current Assets)
Profitability Ratios Net Profit Margin = (Net Profit x 100) /Sales Revenue
Return on Capital Employed = Net Profit (Operating Profit) x 100
(ROCE) Capital Employed
Solvency Ratios Gearing Ratio = Total Liabilities/Shareholders Equity
Investment Ratios Earnings per Share (EPS) = Net Income – Dividends on preferred stock
Average Outstanding Shares
Price/Earnings Ratio (P/E) = Market Price of Share/EPS
Aviation Industry Specific Ratios…
Available Seat Miles = Total No. of Seats Available for Transporting Passengers
(ASM) x No. of Miles Flown during Period
Revenue Passenger Mile = No. of Revenue Paying Passengers x
(RPM) No. of Miles Flown During Period
Load Factor
Quick/Acid Test Ratio = Current Assets less Stock/Current Liabilities
Dividend Yield = Annual Dividends per Share
Price per Share
Liquidity Ratios
Current Ratio = Current Assets/...

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