Financial accounting ratios

  • Created by: ElishaG
  • Created on: 09-05-19 18:24
What is the formula for current ratio?
Liquidity ratio. Current assets/current liabilities.
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What is the formula for quick ratio (acid test)?
Liquidity ratio. (Current assets - inventory)/current liabilities.
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What is the formula for Inventory turnover?
Working capital ratio. Cost of goods sold/closing inventory.
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What is the formula for Inventory days?
Working capital ratio. 365/inventory turnover.
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What is the formula for Debtor days?
Working capital ratio. (Trade debtors/credit sales) x365
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What is the formula for Creditor days?
Working capital ratio. (Trade creditors/credit purchases) x365
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What is the formula for Credit purchases?
Cost of sales -PY closing stock + CY opening stock.
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What is the formula for working capital?
Working capital ratio. Inventory days + debtor days - creditor days.
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What is the formula for Gross profit margin?
Profitability ratio. (Gross profit/ sales) x100.
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What is the formula for Operating profit margin?
Profitability ratio. (Profit before interest and tax/sales) x100.
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Other cards in this set

Card 2

Front

What is the formula for quick ratio (acid test)?

Back

Liquidity ratio. (Current assets - inventory)/current liabilities.

Card 3

Front

What is the formula for Inventory turnover?

Back

Preview of the front of card 3

Card 4

Front

What is the formula for Inventory days?

Back

Preview of the front of card 4

Card 5

Front

What is the formula for Debtor days?

Back

Preview of the front of card 5
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