Accouting Ratios Flashcards
Profitability ratios
ROCE Gross Profit Margin Operating Profit Margin Asset Turnover Operational Gearing Ratio
ROCE formula
Operating Profit / Capital Employed x 100
Gross Profit Margin formula
Gross Profit / Revenue x 100
Operating Profit Margin formula
Operating Profit / Revenue x 100
Asset Turnover formula
Revenues / Capital Employed (assets used in business)
Operational Gearing Ratio formula
(Revenues - variable costs) / Operating Profit
Liquidity ratios
Current Ratio
Quick (acid test) Ratio
Working Capital measures (receivables collection period; payables payment period; inventory turnover)
Current Ratio formula
Current assets / Current Liabilities
Quick (acid test) Ratio formula
(Current Assets - Inventory) / Current Liabilities
Receivables collection period formula
Outstanding trade receivables / Revenue x 365
Payables Payment Period formula
Outstanding Trade Payables / cost of sales x 365
Inventory Turnover formula
Cost of goods / Inventory
Gearing ratios
Debt to Equity
Interest Cover
Debt to Equity Ratio formula
(Interest Bearing Loans + Preferential Share Capital) / Equity Shareholders’ Funds x 100
Interest cover formula
(Operating Profit + Interest Receivables + Other Receivables) / Interest Payable
Investor Ratios
EPS ROE PE Ratio PEG Ratio EBITDA EV
EPS formula
Net profit to ordinary shareholders / Av no ordinary shares in issue
ROE Formula
Net profit to ordinary shareholders / Ordinary Shareholders Funds x 100
PE Ratio formula
Ordinary share price / EPS
PEG Ratio Formula
PE Ratio / Expected Growth Rate in Earnings
EBITDA formula
Revenue - expenses (excluding tax, Interest, depreciation and amortisation
EV formula
(Market cap + outstanding debt + pref shares + minority shares) - (cash + cash equivalents)
Yield ratios
Earnings yield
Dividend yield
Earnings Yield formula
EPS / Share price x 100
Dividend Yield formula
DPS / Share price x 100
