Chapter 14 Flashcards by Chloe Harrison | Brainscape

Q

Stock market ratio

Earnings per share (EPS)

A

Profit after tax/ No. of Shares

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Q

Stock market ratio

Price-earnings ratio
P/E

A

Share price/ EPS

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Q

Stock market ratio

Dividend yield

A

Dividend per share/ share price

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Q

Stock market ratio

Dividend cover

A

EPS/ Dividend per share

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Q

Gearing ratio

SOFP

A

Debt/ equity or debt/ equity + debt

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Q

Gearing ratio

P/L

Interest cover

A

EBIT/ interest

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Q

Liquidity ratio

Current ratio

A

Current assets/ current liabilities

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Q

Liquidity ratio

Debtors days

A

Receivables/credit sales * 365

If credit sales not given, use revenue

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Q

Liquidity ratio

Creditor days

A

Payables/ credit purchases * 365

If credit purchases not given, use cost of sales

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Q

Liquidity ratio

Inventory holding period

A

Inventory/ cost of sales * 365

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Q

Liquidity ratio

Cash operating cycle

A

Debtor days + inventory holding days - creditor days

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Q

Profitability ratio

Return on capital employed (ROCE)

A

EBIT/ capital employed * 100%

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Q

Profitably ratio

Asset turnover

A

Revenue/ capital employed

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Q

Profitability ratio

Profit margin

A

EBIT/ Revenue * 100%

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