The Quick Ratio is a more conservative test of a company's liquidity, than the Current Ratio. By taking inventories out of the equation, Quick Ratio lets us find out if a company has sufficient liquid assets to meet its short-term operating needs.

Reserves & Surplus which basically is the amount of capital the company has generated over its lifetime - minus dividends and stock buybacks.

Practical Use
Reserves & Surplus is a cumulative account; therefore each year that the company makes a profit and doesn't pay it all out in dividends, reserves & surplus increase. Likewise if a company has lost money over time, reserves & surplus can turn negative. Think of this as a company's long term track record at generating profits.

Think of ROA as a measure of efficiency. Companies with high ROAs are better at translating Assets into Profits. ROA helps us understand that there are two routes to excellent operational profitability. You can charge high prices for your products (high margins) or you can turn over your assets quickly.

Practical Use
ROA tells an investor how much profit a company generated for each dollar/rupee in assets. When using ROA as a comparative measure it is best to compare it against a firm's previous ROA numbers or the ROA of a similar company. ROA for public companies can vary substantially and will be highly dependent on the industry.

Return on Equity (ROE) is a great overall measure of a company's profitability because it measures the efficiency with which a company uses shareholders' equity. Think of it as measuring profits per dollar/rupee of shareholders' capital.

Significantly, Return on Equity can tell us more than just the efficiency of using shareholders capital. ROE provides a direct peek into how well a firm balances the 3 pillars - Profitability, Asset Turnover and Financial Leverage - to provide decent returns on shareholders' equity.

Practical Use
So we have three levers that can boost Return on equity -net margins, asset turnover, and financial leverage. For example, a firm can have only so-so margins and modest levels of financial leverage, but it could do a great job with asset turnover (e.g. a well run discount retailer).

The Return on Capital Employed (ROCE) ratio, complements the Return on Equity (ROE) ratio. Many analysts consider the ROCE metric to be a more comprehensive profitability indicator because it gauges management's ability to generate earnings from a company's total pool of capital - by adding a company's debt liabilities to equity to reflect a company's total "capital employed".

Practical Use
It is useful to look at both RoE and RoCE while evaluating a company’s profitability. The impact of high leverage (if used) will show up in the lower RoCE figures.

Return on Invested Capital (ROIC) is a sophisticated way of analysing a stock for return on Capital that adjusts for some peculiarities of RoA and RoE. Its worth knowing how to interpret it because it’s overall a better measure of profitability than ROA and ROE.

Sales Turnover achieved by the company on a per share basis

Sometimes labeled as just "Sales", this is simply how much money the company has brought in during the year from actual operations. It does not include Other Income

This number known also as Operating expenses, includes items such as marketing, administrative salaries, and miscellaneous expenses.

Practical Use
You will often see a relationship between SG&A and Gross Margin - companies that are able to charge more for their goods have to spend more on salespeople and marketing. You can get a feel of how efficient a company is by looking at SG&A as a percentage of revenues - a lower percentage of operating expenses relative to Sales, generally means a tighter, more cost-effective company.

Shareholders' Equity is equal to Total Assets minus Total Liabilities and it represents the part of the company owned by shareholders

It represents the shares outstanding during the reporting year. This figure represents the number of shares used in calculating earnings per share

Credit extended to customers - bills that the company hasn't yet collected but for which it expects to receive payments soon. The Sundry Debtors balance is the total money owed to the company by customers at the end of the reporting period. A low balance may indicate that the company is efficient in its collections or that credit standards are too restrictive and depressing sales. A large balance may indicate that the company is having difficulty collecting the money it is owed and its credit standards are too lax.

Practical Use
Watch how this account changes relative to the companies sales -if sundry debtors are rising much faster than sales, the firm is booking a large amount of revenue for which it has yet to receive payments. This can be a sign of trouble because this may mean that the company is offering looser credit terms to increase sales; remember a company can record a sale as soon as it has shipped the product

Taxes paid to the government. It is usually the last expense listed before Profit after Tax or Net Profit in the P&L Account.

Practical Use
In general the tax rate for Indian companies is 30%. If the tax rate for a company you are analysing is much lower than this, find out why, and find out whether that tax advantage is likely to be long term or temporary. Some states provide long-term tax incentives for starting industries in backward regions, e.g.

In addition, look at the tax rate of the company over time. If it bounces from year to year, the company may be generating earnings by playing with tax loopholes rather than selling more goods or services.

All the property owned by a company. Total assets include current assets; fixed assets such as buildings, plant and machinery, and other assets such as licenses and goodwill.

Practical Use
Since many assets are depreciated or carried on the books at the purchase price rather than market value, asset values can be understated on balance sheets.

The amount of money that a company has borrowed (loans), and needs to repay. It can consist of secured and unsecured loans. Some of the debt may be repayable within a year (Short Term Debt), while others may be payable after periods of more than a year (Long Term Debt)

Total liabilities represent the sum of all monetary obligations of a business and all claims creditors have on its assets. It includes all the Current Liabilities, Long Term Debt, and any other miscellaneous liabilities the company may have.

Working Capital indicates the amount of capital that is utilized by the company in financing its day-to-day operations. Also known as Net Current Assets

Practical Use
Working capital gives investors an idea of the company's underlying operational efficiency. Money that is tied up in inventory or money that customers still owe to the company cannot be used to pay off any of the company's obligations. So, if a company is not operating in the most efficient manner, it will show up as an increase in the working capital.