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

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2
Q

Gearing Ratio

A

Debt / Equity

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3
Q

Compute Gearing Ratio

Equity - 150k
Reserves - 237k
Debentures - 200k
Provision - 30k
Cash - 20k
A

Debt / Equity

200k / (150k + 237k)

51.67%

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4
Q

Interest Coverage

A

EBIT / Interest Payable

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5
Q

Dividend Yield

A

Dividend per share / Market price per share

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6
Q

Dividend cover

A

Profit after tax / Dividend payable

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