financial ratios - component 2 formulas

Question 1

shareholders funds

Answer 1

share capital + reserves+retained profit

Question 2

total equity

Answer 2

share capital+ reserves+ retaained profit

Question 3

capital employed

Answer 3

shareholders funds + long term liabilities

Question 4

working capital

Answer 4

current assets - current liabilities

Question 5

ROCE defintion

Answer 5

how effectively the capital invested into a business is used to create profits

Question 6

ROCE formula

Answer 6

net profit before tax / shareholders funds(equity) + long term liabilities
X100

operating profit/ capital employed X100

Question 7

liquidity defintion

Answer 7

ability of a business to pay of its short term debts and the avalibility of working capital avaliable

Question 8

current ratio formula

Answer 8

current assets/ current liabilties :1

Question 9

acid ratio formula

Answer 9

current assets- stock / current liabilities :1

Question 10

gearing ratio

Answer 10

long term liabilties ( non-current liabilities)/ long term liabilities + shareholders fund ( capital employed

x100

Question 11

gross profit margin

Answer 11

gross profit / sales revenue X100

Question 12

operating profit margin

Answer 12

operating profit / sales rev X100

Question 13

net profit margin

Answer 13

net profit for year/ sales revenue X100

Question 14

net profit

Answer 14

TR -total expenses

Question 15

net book value

Answer 15

historic cost- depreciation