Chp 15: Financial Statement Analysis Flashcards by Loh Hwee Hwa | Brainscape

Q

Can you recall the formula?

Gross profit margin

A

Gross profit x 100%

Net sales revenue

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Q

Can you recall the formula?

Mark-up on cost

A

Gross profit x 100%

Cost of sales

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Q

Can you recall the formula?

Profit margin

A

Profit for the period x 100%

Net sales revenue

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Q

Can you recall the formula?

Return on equity

A

Profit for the period x 100%

Average* equity

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Q

Can you recall the formula?

Current ratio

A

Total current assets

Total current liabilities

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Q

Can you recall the formula?

Quick ratio

A

Total current assets – inventory- Prepayments

Total current liabilities

Or use Current assets excluding inventory and prepayments

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Q

Can you recall the formula?

Rate of Inventory turnover

A

Cost of sales____\_

* Average inventory

= XX TIMES

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Q

Can you recall the formula?

Days sales in inventory

A

Average inventory x 365

Cost of sales

= XX DAYS

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Q

Can you recall the formula?

Rate of trade receivables turnover

A

Net credit sales revenue

AVERAGE net trade receivables

= XX times

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Q

Can you recall the formula?

Trade receivables collection period (days)

A

Ave net trade receivables x 365

Net credit sales revenue

= XX days

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