Chapter 27 - Ratio Analysis Flashcards
1
Q
Which variable wont impact ROCE?
Interest/Debt/Equity/Sales
A
Interest
Because ROCE is calculated as:
EBIT/Total Capital Employed
Change in interest wont impact EBIT
2
Q
Gearing Ratio
A
Debt / Equity
3
Q
Compute Gearing Ratio
Equity - 150k Reserves - 237k Debentures - 200k Provision - 30k Cash - 20k
A
Debt / Equity
200k / (150k + 237k)
51.67%
4
Q
Interest Coverage
A
EBIT / Interest Payable
5
Q
Dividend Yield
A
Dividend per share / Market price per share
6
Q
Dividend cover
A
Profit after tax / Dividend payable