accounting financial ratio formulas Flashcards
profitability ratios, liquidity ratios, efficiency ratios, capital structure ratio, investor ratios
(profitability ratio)
gross profit margin ?
gross profit / revenue x 100
- answer in percentage
(profitability ratio)
gross profit mark-up ?
gross profit / cost of sales x 100
- answer in percentage
(profitability ratio)
expenses in relation to revenue ?
expenses / revenue x 100
- answer in percentage
(profitability ratio)
profit in relation to revenue ?
profit before tax / revenue x 100
- answer in percentage
(profitability ratio)
return on capital employed ?
- sole trader
profit before interest / capital employed x 100
- answer in percentage
- capital + non-current liabilities
(profitability ratio)
return on capital employed ?
- limited company
profit from operations / capital employed x 100
- answer in percentage
- equity + non-current liabilities
(liquidity ratio)
current ratio ?
current assets / current liabilities
- answer in ratio form
(liquidity ratio)
liquid capital ratio ?
current assets - inventory / current liabilities
- answer in ratio form
(efficiency ratio)
rate of inventory turnover ?
- days
average inventory / cost of sales x 365
- answer in days
- opening inventory + closing inventory / 2
(efficiency ratio)
rate of inventory turnover ?
- times
cost of sales / average inventory
- answer in times per year
- opening inventory + closing inventory /2
(efficiency ratio)
trade receivable days ?
trade receivables / credit sales x 365
- answer in days
(efficiency ratio)
trade payable days ?
trade payables / credit purchases x 365
- answer in days
(capital structure ratio)
capital gearing ?
non-current liabilities / issued share capital + reserves + non-current liabilities (x 100)
- answer in decimals or percentage
(investor ratio)
dividend yield ?
dividend per share / market price per share x 100
- answer in percentage
(investor ratio)
earnings per share ?
earnings (profit after tax) / number of issued ordinary shares
- answer in £
(investor ratio)
dividend cover ?
profit after interest and tax / ordinary share dividends paid
- answer in
(investor ratio)
price earnings ?
current market price / earnings per share
- answer as decimal
(investor ratio)
interest cover ?
profit before interest and tax / interest payable
- answer in decimal
