Financial Ratios
- Created by: 13fernandesr
- Created on: 26-02-18 11:45
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- Financial Ratios
- Gross Profit
- Current Assets- Current Liabilities
- Net Profit
- Gross Profit - Expenses
- Gross Profit Margin
- Gross Profit / Sales Revenue * 100
- This compares the gross profit with the sales. The higher the figure the better. 56% means that for every £1 of sales, 56p is the gross profit.
- This enables the business to assess the impact of its sales and how much those sales cost.
- Factors affecting: How many units sold, Price of the prducts, Price the suppliers charge
- Reduce the cost of the sales
- This compares the gross profit with the sales. The higher the figure the better. 56% means that for every £1 of sales, 56p is the gross profit.
- Gross Profit / Sales Revenue * 100
- Net Profit Margin
- Net Profit / Sales Revenue * 100
- This compares the net profit with the sales made. the higher the figure the better. 32% means that for every £1 of sales 32p is the net profit made.
- Factors affecting: Wages, rent, cost of supplies, bills
- Reduce the expenses
- Takes into account the fixed costs involved.
- Factors affecting: Wages, rent, cost of supplies, bills
- This compares the net profit with the sales made. the higher the figure the better. 32% means that for every £1 of sales 32p is the net profit made.
- Net Profit / Sales Revenue * 100
- Return of Capital Employed (ROCE)
- Net Profit Before Tax / Capital Employed *100
- Untitled
- Net Profit Before Tax / Capital Employed *100
- Current Ratio
- Current Assets / Current Liabilites
- Acid Test
- (Current Assets - Stock) / Current Liailities
- Gross Profit
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