Book 2 Flashcards
How to calculate current assets from balance sheets
Inventories + receivable + cash and other cash equivalents
What is the balance sheet formula for working capital (net current assets)
Current assets - current liabilities
What is the formula for net assets in balance sheets
Non-current assets + current assets - current liabilities - non current liabilities
Formula for net worth in balance sheets
Non-current assets + working capital (net current assets) - non current liabilities
Formula for assets employed
Net current assets + non current assets
Formula for total equity
Share capital + reserves
Calculation for capital employed
Total equity + non-current liabilities
Calculate assets employed
Capital employed
What is the formula for assets
Liabilities + equity
Formula for operating profit
Gross profit - expense +/- exceptional items
Calculation for profit before tax
Operating profit + finance income - finance costs
Formula for profit for the year
Profit before tax - taxation
What is the formula for ROCE
RETURN OF CAPITAL EMPLOYED (%)
Operating profit or profit before tax
————————– total equity + non current liabilities
X100
How is current ration calculated?
Current assets:current liabilities
What is the formula for gearing ratio?
Total equity + non current liabilities
X100
How do you calculate payable days?
Costs of sales
X365
What formula calculates receivable days
Revenue (annual sales)
X365
How do you calculate inventory turnover?
Average inventories held
What is the formula for the average rate of return? (ARR%)
Initial cost
X100
How do you calculate payback period
Adding Annual returns from an investment (annual cost - net return = cumulative returns) until the cumulative return goes positive
