Financial Indicators For Paper 2 Flashcards
1
Q
% gross profit on cost of sales
A
(GP ÷ COS) ×100
2
Q
% net profit on sales
A
(NP ÷ TO) ×100
3
Q
Average trading stock
A
Cost of sales ÷ 2
4
Q
% operating expenses on sales
A
(OP ÷ TO) ×100
5
Q
% operating profit on sales
A
(OP ÷ TO) ×100
6
Q
Stock turnover rate / stock on hand
A
Cost of sales ÷ average trading stock
7
Q
Stock holding period
A
(Average trading stock ÷ cost of sales) ×12
Or
(Average trading stock ÷ cost of sales) ×365
8
Q
Average debtors’ collection period
A
(Average debtors ÷ credit sales) ×365
9
Q
Average creditors’ payment period
A
(Average creditors ÷ credit purchases) ×365
