Formulas Flashcards
Capital Gearing formula
Non current liabilities/ (Issued share capital + Reserves + Non-current liabilities)
or
NCL/ capital employed (total equity + NCL)
Current Ratio
Current Assets/Current Liabilities ( Expressed as x:1)
Dividend cover
Profit after interest and tax/ Ordinary share dividends paid
Dividend yield
Dividend per share/ Market price per share x 100
Earnings per share
Earnings in pence (Profit After Tax in pence)/ Number of issued ordinary shares
Expenses in relation to revenue
Expenses / Revenue x 100
Gross profit margin
Gross profit / revenue x 100
Interest cover
Profit before interest and tax/ Interest payable (incl in finance cost)
Liquid capital ratio (acid test ratio)
Current assets- inventory/ current liabilities
expressed as x:1
Markup
Gross profit/ Cost of Sales x 100
Price earnings
current market price / earnings per share
Profit in relation to revenue
Profit before tax/ Revenue x 100
Rate of inventory turnover
Cost of sales/ Average inventory (average inventory = opening + closing inventory /2)
Rate of inventory turnover (days)
Average inventory/ Cost of sales x 365
Return of capital employed (sole trader)
Profit before interest / Capital employed x 100
Return on capital employed (limited company)
Operating profit/ capital employed x 100
Capital employed= Equity + non current liabilities (either opening or closing figure could be used in the calculation)
Trade payable days
Trade payables days/ Credit Purchases x 365
Trade receivable days
Trade receivables/Credit sales x 365
Total dividend paid
Profit after tax/ dividend cover
Disposal proceeds
disposal proceeds - NBV= P/L
Dividends paid
Number of shares x Dividend per share
Number of shares
Share capital / nominal value of each share
Using mark up to calculate missing figures
Gross profit / Cost of Sales x 100
Cost of Sales = Revenue / 1.6
Revenue = Cost of Sales x 1.6
Cost of Sales
Opening inventory + Purchases - Purchase returns + Carriage inwards - Closing inventory
Using gross profit margin to calculate missing figures
GP = Revenue x 0.6
revenue = GP/ 0.6
revenue = C.O.S / 0.4
Gross profit
Revenue - Cost of Sales
Profit for the year
Gross profit + other income - expenses
Operating profit (limited company income statement)
Gross profit + other income - expenses
Using statements of affairs to calculate profit for the year
Balance at the start of the year
+ capital introduced
+ profit for the year
- drawings
= balance at the end of the year
Contribution per unit
Selling price - variable cost per unit
Total contribution
Contribution per unit x number of units sold
Total contribution 2
Total revenue - total variable costs
Margin of safety
Actual level of output - Breakeven level of output
Break even output
Fixed costs / contribution per unit
Bust year
Total required for payback/ cash inflow in the bust year
Net cash outflows
Cash inflows - cash outflows
