Ratios 0.0 / 5 ? Business StudiesFinancial PlanningA2/A-levelOCR Created by: ChantallehelmCreated on: 15-12-13 19:55 Gross profit margin Gross profit/sales turnover x 100 1 of 23 Net profit margin Net profit/sales turnover x 100 2 of 23 Return on capital employed net profit/capital employed x 100 3 of 23 Stock turnover stock/purchases x 365 4 of 23 Current asset ratio current assets/current liabilities 5 of 23 Acid test ratio current assets-stock/current liabilities 6 of 23 Debtors collection period debtors/revenue x 365 7 of 23 creditors payment period creditors/cost of sales x 365 8 of 23 Price earnings ratio market price/earnings per share=x times 9 of 23 Return on Equity Profit accruing to ordinary shareholders/ordinary share capital + reserves x 100 = x% 10 of 23 Earnings per share Profit accruing to ordinary shareholders/number of ordinary shares = x pence 11 of 23 Dividend per share Total dividends payable or received/number of shares issued= x pence 12 of 23 Dividend cover Profit accruing to ordinary shareholders/dividends=x times 13 of 23 Dividend yield Dividend paid on ordinary shares/market price per share x 100 = x% 14 of 23 Gearing Long term loans/capital employed x 100 = x% 15 of 23 Interest cover Profit before interest and tax/Interest = x times 16 of 23 What is said to be the ideal for current ratio? 1.5 to 2:1 17 of 23 What is said to be the ideal for acid test ratio? 1:1 18 of 23 What does interest cover measure? It measures the number of times profit covers any interest payable on loans 19 of 23 What does gearing measure? It measures the extent to which a business is dependent on borrowed funds for its financial stability 20 of 23 What does debt collection period measure? It measures the number of days it takes a business to collect any money owed by it's customers (its debtors) 21 of 23 What does net profit margin measure? It measures what percentage of a firm's sales revenue is net profit. 22 of 23 What does return on capital employed measure? It expresses the profit of the business as a percentage of the capital invested. 23 of 23
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