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Financial Management ACCA > Chapter 11 - Financial ratios > Flashcards

Chapter 11 - Financial ratios Flashcards

1
Q

What is the formula for Return on capital employed (ROCE) (Accounting rate of return)?

A

(Operating profit) Γ· (Equity and non current liabilities)

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2
Q

What is the formula for Operating profit margin?

A

(Operating profit) Γ· (Sales revenue)

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3
Q

What is the formula for Asset turnover?

A

(π‘†π‘Žπ‘™π‘’π‘  π‘Ÿπ‘’π‘£π‘’π‘›π‘’e) Γ· (πΈπ‘žπ‘’π‘–π‘‘π‘¦ π‘Žπ‘›π‘‘ π‘π‘œπ‘› πΆπ‘’π‘Ÿπ‘Ÿπ‘’π‘›π‘‘ πΏπ‘–π‘Žπ‘π‘–π‘™π‘–π‘‘π‘’s)

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4
Q

What is the formula for Return on equity (ROE)?

A

(π‘ƒπ‘Ÿπ‘œπ‘“π‘–π‘‘ π‘Žπ‘“π‘‘π‘’π‘Ÿ π‘‘π‘Žπ‘₯ π‘Žπ‘›π‘‘ π‘π‘Ÿπ‘’π‘“π‘’π‘Ÿπ‘’π‘›π‘π‘’ 𝑑𝑖𝑣𝑖𝑑𝑒𝑛d) Γ· (πΈπ‘žπ‘’π‘–π‘‘π‘¦ (𝑒π‘₯𝑐𝑙𝑒𝑑𝑖𝑛𝑔 π‘π‘Ÿπ‘’π‘“π‘’π‘Ÿπ‘’π‘›π‘π‘’ π‘ β„Žπ‘Žπ‘Ÿπ‘’π‘ ))

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5
Q

What is the formula for Earnings per share (EPS)?

A

(πΈπ‘Žπ‘Ÿπ‘›π‘–π‘›π‘”π‘  π‘Žπ‘£π‘Žπ‘–π‘™π‘Žπ‘π‘™π‘’ π‘‘π‘œ π‘œπ‘Ÿπ‘‘π‘–π‘›π‘Žπ‘Ÿπ‘¦ π‘ β„Žπ‘Žπ‘Ÿπ‘’β„Žπ‘œπ‘™π‘‘π‘’π‘Ÿs) Γ· (π‘π‘’π‘šπ‘π‘’π‘Ÿ π‘œπ‘“ π‘œπ‘Ÿπ‘‘π‘–π‘›π‘Žπ‘Ÿπ‘¦ π‘ β„Žπ‘Žπ‘Ÿπ‘’π‘  𝑖𝑛 𝑖𝑠𝑠𝑒𝑒)

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6
Q

What is the formula for Price/Earnings (P/E) ratio?

A

(Share price) Γ· (EPS)

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7
Q

What is the formula for Dividend per share (DPS)?

A

(𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠 π‘π‘Žπ‘¦π‘Žπ‘π‘™π‘’ π‘‘π‘œ π‘œπ‘Ÿπ‘‘π‘–π‘›π‘Žπ‘Ÿπ‘¦ π‘ β„Žπ‘Žπ‘Ÿπ‘’β„Žπ‘œπ‘™π‘‘π‘’π‘Ÿs) Γ· (π‘π‘’π‘šπ‘π‘’π‘Ÿ π‘œπ‘“ π‘œπ‘Ÿπ‘‘π‘–π‘›π‘Žπ‘Ÿπ‘¦ π‘ β„Žπ‘Žπ‘Ÿπ‘’π‘  𝑖𝑛 𝑖𝑠𝑠𝑒e)

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8
Q

What is the formula for Dividend yield?

A

(DPS) Γ· (Share price)

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9
Q

What is the formula for Dividend cover?

A

(EPS) Γ· (DPS)

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10
Q

What is the formula for Total Shareholder Return (TSR)?

A

(𝐷𝑃𝑆 π‘Žπ‘›π‘‘ π‘β„Žπ‘Žπ‘›π‘”π‘’ 𝑖𝑛 π‘ β„Žπ‘Žπ‘Ÿπ‘’ π‘π‘Ÿπ‘–π‘e) Γ· (π‘†β„Žπ‘Žπ‘Ÿπ‘’ π‘π‘Ÿπ‘–π‘π‘’ π‘Žπ‘‘ π‘ π‘‘π‘Žπ‘Ÿπ‘‘ π‘œπ‘“ π‘π‘’π‘Ÿπ‘–π‘œd)

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11
Q

What is the formula for Gearing

A

(π‘π‘œπ‘› πΆπ‘’π‘Ÿπ‘Ÿπ‘’π‘›π‘‘ πΏπ‘–π‘Žπ‘π‘–π‘™π‘–π‘‘π‘’s) Γ· (πΈπ‘žπ‘’π‘–π‘‘π‘¦ π‘Žπ‘›π‘‘ π‘π‘œπ‘› πΆπ‘’π‘Ÿπ‘Ÿπ‘’π‘›π‘‘ πΏπ‘–π‘Žπ‘π‘–π‘™π‘–π‘‘π‘–π‘’s)

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12
Q

What is the formula for Interest cover

A

(π‘‚π‘π‘’π‘Ÿπ‘Žπ‘‘π‘–π‘›π‘” π‘π‘Ÿπ‘œπ‘“π‘–t) Γ· (πΉπ‘–π‘›π‘Žπ‘›π‘π‘’ π‘β„Žπ‘Žπ‘Ÿπ‘”π‘’ (π‘–π‘›π‘‘π‘’π‘Ÿπ‘’π‘ π‘‘ π‘π‘Žπ‘¦π‘Žπ‘π‘™π‘’))

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13
Q

What is gordons growth formula? (My way)

A

Return on capital employed x (1- div %)

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14
Q

What is the formula for Earnings yield?

A

EPS / Share price

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15
Q

What is the formula for value of a company including growth with the earnings yield method.

A

Earnings x (1+g) Γ· Earnings yield - g

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16
Q

What is pay out ratio?

A

DPS/EPS

17
Q

What is the retention ratio?

A

1 - payout ratio

Financial Management ACCA (26 decks)

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