BUSS3 ratios 0.0 / 5 ? Business StudiesUnemploymentA2/A-levelAQA Created by: KathrynCreated 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
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