Ratio analysis

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  • Created by: apple87
  • Created on: 02-03-15 17:17
How do you calculate gross profit margin?
Gross Profit/Sales x 100
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How do you calculate Gross Profit Mark- Up
Gross profit/Cost of sales x 100
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How do you calculate overheads in relationship to revenue?
Overheads/sales x 100
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How do you calculate return on capital employed?
Profit from operations/capital employed x 100
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How do you calculate Liquid capital ratio?
Current assets- inventory / current liabilities
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How do you calculate net current asset ratio?
Current assets/current liabilities
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How do you calculate rate of inventory turnover?
Cost of sales/ average inventory(opening inventory+clossing inventory/2)
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How do you calculate trade receivables days?
Trade receivables/Credit sales x 365
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How do you calculate trade payable days?
Trade payables/Credit purchases x365
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How do you calculate gearing?
Non-Current libailities/Cpital employed x100
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How do you calculate profit in relation to revenue?
Profit for year before tax/sales x 100
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What is gross profit margin?
Shows how much profit the business makes as a percentage of its sales revenue.
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What is gross profit markup?
Expresses the gross profit in relation the cost of slaes, the mark up is how much has been added to the cost price of the stock.
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What is overheads in relation to revenue?
Explores whether overheads are controlled properly each year in relation to sales.
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What is profit in relation to revenue?
Shows how well a business is controlling it expenses.
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What is return of capital employed?
The primary ratio, it measures performance by relating the profit to the size of the business.
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What is net current asset ratio?
Shows the amount of current assets to current liabilities. Therefore the ability to pay short term debts.
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What is liquid capital ratio?
Same as net current asset ration but without the stock as this may take a while to liquidate.
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Rate of inventory turnover?
Shows how quickly a business sells its stock, high stock turnover means a business can operate with lower margins.
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What is trade revceivables days?
Measure of the effeincy of the credit control of business how hard they aree try to collect debt from customers.
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What is trade payables days?
A meaure of how well a business is using its credit facilities with its creditors.
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What is gearing?
Shows the capital structure of the business, how much is funded by long ter loans.
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Other cards in this set

Card 2

Front

How do you calculate Gross Profit Mark- Up

Back

Gross profit/Cost of sales x 100

Card 3

Front

How do you calculate overheads in relationship to revenue?

Back

Preview of the front of card 3

Card 4

Front

How do you calculate return on capital employed?

Back

Preview of the front of card 4

Card 5

Front

How do you calculate Liquid capital ratio?

Back

Preview of the front of card 5
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