Chapter 23 - Analysis of Accounts Flashcards
1
Q
Gross Profit Margin
A
Ratio between gross profit and revenue
Gross profit
——————— x 100
Sales Revenue
2
Q
Profit Margin
A
Ratio between profit before tax and revenue
Profit --------------------- x 100 Sales Revenue
3
Q
Adding Value
A
Selling a product for more than it cost to produce it
4
Q
Return on Capital Employed
(ROCE)
A
Ratio between profit before tac and capital employed
Profit -------------------------- x 100 Capital Employed
5
Q
Liquidity
A
The ability of a business to pay its short term debts
6
Q
Current Ratio
A
The ratio between current assets and current liabilities
Current Liabilities
7
Q
Acid Test Ratio
A
The ratio between liquid assets and current liabilities
Current Liabilities
