Financial Statement Analysis Flashcards
How do you calculate return ordinary shareholders funds (ROSF)
Profit for the year less any preference dividend
—————————————————— X 100
Ordinary share capital + reserves
How do you calculate return on capital employed (ROCE)
Operating profit
———————————————————– x 100
Share capital + reserves + non-current liabilities
How do you calculate operating profit margin?
Operating profit divided by sales revenue times 100
How do you calculate gross profit margin?
Gross profit divided by sales revenue times 100
How do you calculate average inventories turnover period?
Average inventories held divided by cost of sales times 365
How do you calculate average settlement period for trade receivables?
Average trade receivables divided by credit sales revenue times 365
How do you calculate average settlement period for trade payables?
Average trade payables divided by credit purchases times 365
Sales revenue to capital employed?
Sales revenue divided by share capital plus reserves plus non-current liabilities
Sales revenue per employee?
Sales revenue divided by number of employees
What are the four profitability ratios?
Return on ordinary shareholders funds
Return on capital employed
Operating profit margin
Gross profit margin
What are the five efficiency ratios?
Average inventory is turnover period
Average settlement period for trade receivables
Average settlement period for trade payables
Sales revenue to capital employed
Sales revenue per employee
What are the two main liquidity ratios?
Current ratio
Acid test ratio
Current ratio?
Current assets divided by current liabilities
Acid test ratio?
Current assets excluding inventory divided by current liabilities
What are the two financial gearing ratios?
Gearing ratio
Interest cover ratio