banking and financial ratioa
kanchan Bhattad (Student CA Final ) (84 Points)
07 May 2016kanchan Bhattad (Student CA Final ) (84 Points)
07 May 2016
Richa
(Internal Auditor)
(122 Points)
Replied 08 May 2016
TOL/TNW shows comparison of total outside liabilities (current and term liabilities both)and tangible net worth. It is considered as a better indicator of solvency. There is no ideal ratio or benchmark is set for this ratio.
Higher ratio would indicate excessive dependence on outside funds and may be considered as a negative factor.