Aim:
To test the significant relationship between the accounting ratios of operating management and standard ideal ratios.
Null Hypothesis(H0) :
There is no significant relationship between the accounting ratios of operating management and standard ideal ratios.
Alternative Hypothesis(H1) :
There is a significant relationship between the accounting ratios of operating management and standard ideal ratios.
Table: Calculation of correlation co-efficient between the accounting ratios of operating management and standard ideal ratios of X ltd.
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Financial accounting ratios
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Karl's Pearson's co-efficient of correlation
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Calculated value(t)
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Table value
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Significant/Not significant
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Fixed assets turnover ratio
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0.75
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2.27
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Return on investment
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Gross profit ratio
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Return on total assets
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Return on networth
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Return on net assets
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