Lists the value of the items a business owns (assets) minus the value of the items the owe (liabilities) to show the overall value of the business.
Statement of Financial Position
1 of 13
Items owned for a period of more than one year.
Non-current assets (Fixed Assets)
2 of 13
Items owned for a period of less than one year.
Current Assets
3 of 13
Items owed for a period of less than one year.
Current Liabilities
4 of 13
Measure how profitable a business is.
Profitability ratios
5 of 13
Measures the percentage of profit made from buying and selling. The higher the better.
Gross profit percentage
6 of 13
Measures the percentage of profit made once expenses are deducted from gross profit. The higher the better.
Net profit for the year percentage
7 of 13
Measures the percentage of investment returned to shareholders. The higher the percentage the happier shareholders will be.
Return on capital employed
8 of 13
Measure the ability to repay short term debts.
Liquidity ratios
9 of 13
Compares current assets and current liabilities to measure the ability to repay short term debts. Expressed as ?:1. Over 2:1 is ideal as this shows the business can pay its debts twice over.
Current ratio
10 of 13
Compares current assets minus stick and current liabilities to measure the ability to repay short term debts in a crisis situation (when there might not be time to sell stock). Expressed as ?:1. 1:1 is acceptable as this shows a business can repay it
Acid test ratio
11 of 13
Measure how well a business uses their resources.
Efficiency ratios
12 of 13
Measures the amount of times a business re-stocks during the year.
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