BUSS3 ratios

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  • Created by: Kathryn
  • Created on: 20-02-14 13:32
acronym, indicated how much money is made by the business, compared to how much has been put in
ROCE
1 of 10
can be reffered to as working capital ratio, should be higher than 1:1, value below 1.5:1 suggests liquidity/solvency problem
Current Ratio
2 of 10
Indicates the extent to which business relies upon borrowed funds compared to equity funds
gearing
3 of 10
measures the number of times a year a business sells the value of its stocks, aims to get stockholding as low as possible
stock turnover
4 of 10
how quickly a business collects its debts. In general, 30 - 45 days is desirable but varies between industries
debtor days
5 of 10
How quickly a business can pay its creditors
creditor days
6 of 10
tells us how much profit a business makes per £1 on cost of sales, can be improved by increasing prices
gross profit margin
7 of 10
tells us amount of net profit per £1 of turnover a business has earned. Can be improved through lowering costs
net profit margin
8 of 10
shows the annual percentage return on money needed to purchase a share - is good if its higher than rate of interest
dividend yield
9 of 10
ideally between 0.75:1 and 1:1, shows amount of liquid assets in relation to every £1 of liablities
acid test
10 of 10

Other cards in this set

Card 2

Front

can be reffered to as working capital ratio, should be higher than 1:1, value below 1.5:1 suggests liquidity/solvency problem

Back

Current Ratio

Card 3

Front

Indicates the extent to which business relies upon borrowed funds compared to equity funds

Back

Preview of the front of card 3

Card 4

Front

measures the number of times a year a business sells the value of its stocks, aims to get stockholding as low as possible

Back

Preview of the front of card 4

Card 5

Front

how quickly a business collects its debts. In general, 30 - 45 days is desirable but varies between industries

Back

Preview of the front of card 5
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