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CISI Unit 2 formulae > Formulae > Flashcards

Formulae Flashcards

1
Q

Current Ratio

A

current assets/current liabilities

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2
Q

Quick Ratio

A

(current assets - inventory)/current liabilities

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3
Q

EPS

A

Profit/num of shares

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4
Q

P/E ratio

A

price per share/earnings per share

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5
Q

What does high P/E suggest?

A

High growth prospects/over valued

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6
Q

What does low P/E suggest?

A

Undervalued

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7
Q

EV/EBITDA

A

EV/EBITDA

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8
Q

Dividend yield

A

div per share/market price *100

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9
Q

What does low Div yield suggest?

A

High future growth

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10
Q

Div cover

A

Earnings per share/dividend per share

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11
Q

Interest cover ratio

A

profit before tax and interest/interest expense

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12
Q

Return on capital employed (ROCE)

A

operating profits/capital employed * 100

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13
Q

Return on equity (ROE)

A

net income/shareholders equity *100

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14
Q

Total assets

A

Equity + liabilities

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15
Q

Profit Margin

A

profit/revenue

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16
Q

What are the 3 financial statements?

A

Statement of Financial Position
Income Statement
Cash flow statement

17
Q

Name of accounting standards

A

General Accepted Accounting Principles (GAAP))

18
Q

What is on the statement of financial position?

A

Assets (non/current assets)
Capital and Resreves
Liabilities

19
Q

what are non current assets?

A

Intended to be used for more than a year

20
Q

What are examples of intangible non-current assets?

A

Goodwill
Trademarks
Patents

21
Q

What are examples of tangible non-current assets?

A

Property

Equiptment

22
Q

What is share capital?

A

Nominal value of total shares in issue

23
Q

What is share premium?

A

Any excess above the nominal value raised on ossie

24
Q

Where are uncovered dividends paid from?

A

Retained earnings

25
Q

What two ratios are needed on the statement of financial position?

A

Earnings per share/diluted earnings per share

26
Q

What is the difference between Capital and Revenue Expenditure?

A

Capital - money spent to buy non-current assets

Revenue - Maintain a non-cirrent assets (wages/rent)

27
Q

What should an increase in current assets do to the profit?

A

Subtracted

28
Q

What should a decrease in current liabilities do to the profit?

A

Subtracted

29
Q

What should a decrease in current assets do to the profit?

A

Add

30
Q

What should an increase in current liabilities do to the profit?

A

Add

31
Q

What does it mean if dividend cover is less than 1?

A

Uncovered dividend

CISI Unit 2 formulae (1 decks)

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