Ratios
- Created by: 13warburtonj
- Created on: 26-02-18 11:34
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- Ratios
- Profitability
- GPM = (Gross Profit) / (Sales Revenue) x 100
- NPM = (Net Profit) / (Sales Revenue) x 100
- ROCE = (Net Profit) / (Capital Employed) x 100
- Liquidity
- Acid Test = (Current Assets - Stock) / (Current Liabilities)
- Current Test = (Current Assets) / (Current Liabilities)
- Advantages of Ratios
- Compare current performance with previous
- Compared with competitors
- Highlights issues that can be resolved
- Profitability
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