3.5 Flashcards
1
Q
Liquidity
A
The ability of a firm to pay its short term debts
2
Q
Gross profit margin (%)
A
(Gross profit)/(sales revenue) x100
3
Q
Net profit margin (%)
A
(Net profit)/(sales revenue) x100
4
Q
Return on capital employed (%)
A
(Net profit)/(capital employed) x100
5
Q
Capital employed
A
(Non current assets + current assets)- current liabilities or non current liabilities + shareholders’ equity. The total capital invested in the business
6
Q
Current ratio
A
(Current assets)/(current liabilities)
7
Q
Acid test ratio
A
(Liquid assets)/(current liabilities)
8
Q
Liquid assets
A
Current assets - inventories
