Formulas

Question 1

Return on capital employed

Answer 1

Operating profit //// (equity+non-current liabilities…debts)

X100

-higher the better
Means less debt more profit in proportion

Question 2

Current ratio

Answer 2

Current assets/ current liabilities

Question 3

Acid test ratio

Answer 3

(Current assets-liabilities) \ current liabilities

Question 4

Asset turnover

Answer 4

Revenue (sales)/ net assets

Question 5

Inventory (stock) turnover

Answer 5

Cost of sales/average inventories (stock) held

Question 6

Payables creditor days

Answer 6

(payables/cost of sales) x365

Question 7

Receivables (debtor) days

Answer 7

Receivables (payables)// revenues X365

Question 8

Gearing

Answer 8

Non-current liabilities / (total equity and non current liabilities) x100

Question 9

Dividend yield

Answer 9

Dividend per share//share price X100

Question 10

Gross profit margin

Answer 10

Goss profit // sales revenue X100

Gross profit = profit-cost of sales

Question 11

Working capital

Answer 11

Current assets-current liabilities

Question 12

Operating profit margin

Answer 12

Operating profit // sales revenue X100