Accounting

Question 1

ROCE

Answer 1

Operating Profit/Avg Capital Employed

Question 2

ROE

Answer 2

Profit for year (-preference dividend)/Equity

Question 3

Gross Profit Margin

Answer 3

Gross Profit/ Sales Revenue

Question 4

Gross Profit Markup

Answer 4

Gross Profit/ COGS

Question 5

Operating Profit Margin

Answer 5

Operating Profit/Sales Revenue

Question 6

Inventory Days

Answer 6

(Avg Inventories Held/COGS) * 365

Question 7

Receivables Days

Answer 7

(Avg Trade Receivables/ Credit Sales) * 365

Question 8

Payables Days

Answer 8

(Avg Trade Payables/ Credit Purchases) * 365

Question 9

Net Asset Turnover

Answer 9

Sales Revenue/ Avg Capital Employed

Question 10

Efficiency & Profitability Link

Answer 10

ROCE = Operating Profit Margin * Net Asset Turnover

Question 11

Working Capital

Answer 11

Current Assets - Current Liabilities

Question 12

Current Ratio

Answer 12

Current Assets/Current Liabilities

Question 13

Quick Ratio

Answer 13

Current Assets - Inventories/ Current Liabilities

Question 14

Gearing Ratio

Answer 14

Non-current liabilities/ Avg Capital Employed

Question 15

Debt-to-equity ratio

Answer 15

Total Liabilities/Total Equity

Question 16

Interest Cover

Answer 16

Operating Profit/Interest Expense

Question 17

Dividend Payout Ratio

Answer 17

Dividend for Year/ Profit after Tax (-preference dividend)

Question 18

Dividend Cover Ratio

Answer 18

Earnings available for dividend/ Dividend for year

Question 19

Dividend Yield

Answer 19

Dividend per share/Market Value per share

Question 20

Earnings per Share

Answer 20

Profit after tax (- preference dividend)/Number of ordinary shares

Question 21

P/E ratio

Answer 21

Market value per share/Earnings per share