FINANCIAL RATIO TEST Flashcards
Gross profit margin
Gross profit/turnover x 100 =%
Operating margin
Operating profit/ turnover x 100
Return on capital employed
Operating profit/ total capital employees x 100
Return on shareholders
Profit available to shareholders/ share holders capital employed x 100
Inventory turnover
Average stock/ cost of sales x 365= number of days
Net asset turnover
Turnover/ total net assets(capital employed) = number of times per year
Receivables collection r
Trade receivables/turnover x 365 days
Payable payment
Payables/ cost of sales x 365 days
Current ratio
Current assets / current liabilities
Quick ratio
Current assets less inventory (stock) / current liabilities
Basic gearing
Long term debt/ total capital employed x 100
Interest cover
PBIT or operating profit/ interest paid x 100
Earnings per share
Profit attribute to shareholders/ number of issues ordinary shares
Price- to - earnings ratio
Market price per share/ earnings per share
Dividends
Profit attribute to ordinary shareholders/ dividend future security of the shareholders current dividend
