Business Studies 4 Ratios review 3.0 / 5 based on 2 ratings ? BusinessGCSEAll boards Created by: dansydesCreated on: 13-12-11 16:37 Profit Margin Gross Profit Margin= Gross Profit/ Sales Rev Net Profit Margin= Net Profit/ Sales Rev Example of Net profit margin= Sales: $150,000 Net Profit: $75,000 Net Profit Margin: 75,000 / 150,000 = 0.5 = $0.50 per $1 sales 1 of 4 Return on capitol Employed (Net profit * 100) / capitol employed capitol employed= 600 Net profit= 1200 (1200*100) / 600 = 0.67% 2 of 4 Working Capitol as Ratio Working Capitol = Current Assets : Current Liabilities For Example.... $10,000 Current Assets and $5,000 Current liabilities = 10:5 = 2:1 3 of 4 Acid Test Ratio *Note: Does not include stock* Example: Debtors= $50, Cash= $50, CL= $30 Acid Test Ratio = (Bebtors+Cash) : Current Liabilities = (50+50) : 30 = 100:30 = 10:3 4 of 4
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