Business Formulas

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1. Activity: Stock Turnover

  • Cost of Sales ÷ Stock
  • Sales Revenue ÷ Fixed Assets
  • Current Assets - Stock ÷ Current Liabilities
  • (Debtors ÷ Sales Revenue) X 365
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2. Activity: Debtor Turnover

  • (Debtors ÷ Sales Revenue) X 365
  • Sales Revenue ÷ Fixed Assets
  • Debtors ÷ 365
  • (Sales Revenue ÷ Debtor) X100

3. Activity: Fixed Asset Turnover

  • (Fixed Assets - Stock Turnover) ÷ 365
  • Sales Revenue ÷ Fixed Assets
  • (Fixed Assets + Sales Revenue) X 365
  • (Sales Revenue ÷ Fixed Assets) X 100

4. Profitability: Return on Equity

  • (Net Profit + Revenue ÷ Equity Shareholders Funds) X 100
  • (Gross Profit - Equity Shareholders Funds ÷ Current Assets) X 100
  • (Net Profit ÷ Equity Shareholders Funds) X 100
  • (Gross Profit ÷ Equity Shareholders Funds) X 100

5. Liquidity: Acid Test

  • (Net Profit ÷ Revenue) X 100
  • Current Assets - Stock ÷ Current Liabilities
  • Current Assets ÷ Current Liabilities
  • Sales Revenue ÷ Fixed Assets

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