Analysis of accounts Flashcards
1
Q
List the profitability ratios
A
- ROCE
- gross profit margin
- net profit margin
2
Q
List the liquidity ratios
A
- current ratios
- acid test ratio
3
Q
formula for ROCE
A
ROCE = net profit/ capital employed * 100
4
Q
formula for gross profit margin
A
gross profit margin = gross profit/sales revenue * 100
5
Q
formula for net profit margin
A
net profit margin = net profit/ sales revenue * 100
6
Q
formula for current ratio
A
current ratio = current assets/ current liabilities
7
Q
formula for acid test ratio
A
acid test ratio = current assets - inventories/ current liabilities
