financial ratio calculations Flashcards
1
Q
what is the calculation for return on capital employed (roce) ?
A
net profit before tax* / shareholders’ funds (equity) + long-term liabilities# x 100
- can also use profit before interest and tax or net profit
# known as capital employed
2
Q
what is the current ratio calculation ?
A
current assets / current liabilities
3
Q
what is the acid test ratio calculation ?
A
current assets - stock / current liabilities
4
Q
what is the gearing ratio calculation ?
A
long-term liabilities / capital employed* x 100
- long-term liabilities + shareholders’ funds
5
Q
shareholders’ funds :
(key formulae values)
A
= share capital + reserves
6
Q
total equity :
(key formulae values)
A
= share capital + reserves
7
Q
capital employed :
(key formulae values)
A
= shareholders’ funds + long-term liabilities
8
Q
working capital :
(key formulae values)
A
= current assets - current liabilities
