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Accounting Ratios — Study Plan

Madhya Pradesh Board · Class 12 · Accountancy

A step-by-step study plan for Accounting Ratios, Madhya Pradesh Board Class 12 Accountancy: what to learn first, what to practise and when to revise.

125 questions80 flashcards9 formulas & key relations5 concepts

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An infographic illustrating the role of accounting ratios as a tool for financial statement analysis, showing how they help assess profitability, liquidity, solvency, and efficiency for various stakeh
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One of 15 illustrations for Accounting Ratios in Super Tutor — alongside flashcards, concept maps and practice questions.

Study Plan

1
Day 1–2

Learn the Theory

Read the textbook chapter carefully. Note down definitions, formulas and key ideas. Focus on: 1. Meaning, Use, and Classification of Ratios, 2. Liquidity Ratios, 3. Solvency Ratios.

2
Day 3

Practise

Solve the textbook exercises and extra practice questions. There are 125 questions available for this chapter.

3
Day 4

Revise & Test

Revise key points without looking at your notes. Take a practice quiz and mark weak areas for another pass.

4
Day 7

Spaced Revision

Come back to Accounting Ratios after a week. Use flashcards for quick recall and try past exam questions on this chapter.

What to Focus On

  • A ratio shows the relationship between two or more numbers.
  • A ratio may be expressed as fraction, proportion, percentage, or number of times.
  • Accounting ratios are derived from financial statement figures.
  • Objectives include analysis, comparison, and forecasting.
  • Advantages include simplification, comparison, and problem identification.
  • Ratios help in intra-firm, inter-firm, and industry comparison.
  • Traditional classification includes profit and loss ratios, balance sheet ratios, and composite ratios.
  • Functional classification includes liquidity, solvency, activity, and profitability ratios.
  • Traditional classification is rarely used in practice.

Common Mistakes to Avoid

Current Ratio and Quick Ratio mean the same thing.

In Quick Ratio, only inventory is excluded from current assets.

Current ratio and quick ratio should always be judged only by a fixed ideal number.

Memory Tips

Meaning of accounting ratio

Traditional and functional classification of ratios

Current ratio formula and safe benchmark

Quick ratio and excluded items

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Frequently Asked Questions

What are the important topics in Accounting Ratios for Madhya Pradesh Board Class 12 Accountancy?
Key topics in Accounting Ratios include Meaning, Use, and Classification of Ratios, Liquidity Ratios, Solvency Ratios, Activity or Turnover Ratios. Study these first, then practise questions on each for the Madhya Pradesh Board Class 12 board exam.
How should I revise Accounting Ratios for the Madhya Pradesh Board Class 12 board exam?
Learn the core ideas first, then work through the 125 practice questions on Accounting Ratios. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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