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Financial Accounting > Interpretation of financial statements Formulas > Flashcards

Interpretation of financial statements Formulas Flashcards

1
Q

Change since base period

A

(Current year amount - Base year amount) / Base year amount

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2
Q

Return of ordinary shareholders funds (ROSF)

A

Profit for the year / (Ordinary share capital - Reserves) X 100

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3
Q

Return on capital employed (ROCE)

A

Operating profit / (Share capital + Reserves + Non-current liabilities) X 100

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4
Q

Operating profit margin

A

Operating profit / Sales revenue X 100

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5
Q

Gross profit margin

A

Gross profit / Sales revenue X 100

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6
Q

Efficiency -
Average inventories turnover period

A

Average inventories held / Cost of sales X 100

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7
Q

Efficiency -
Average settlement period for receivables

A

Average trade receivables / Credit sales revenue X 365

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8
Q

Efficiency -
Average settlement period for payables

A

Average trade payables / Credit purchases X 365

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9
Q

Efficiency -
Sales revenue to capital employed ratio

A

Sales revenue / (Share capital + Reserves + Non-current liabilities)

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10
Q

Efficiency -
Sales revenue per employee

A

Sales revenue / Number of employees

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11
Q

Liquidity -
Current ratio

A

Current assets / Current liabilities

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12
Q

Liquidity -
Acid test ratio

A

Current assets / Current liabilities

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13
Q

Gearing -
Gearing ratio

A

Long term liabilities / (Share capital + long term liabilities) X 100

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14
Q

Gearing -
Interest cover ratio

A

Operating profit / Interest payables

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15
Q

Investment -
Dividend payout ratio

A

Dividends announced for the year / Earning for the year available for dividends X 100

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16
Q

Investment -
Dividend cover ratio

A

Earning for the year available for dividends / Dividends announced for the year

17
Q

Investment -
Dividend yield ratio

A

Dividend per share / Market value per share X 100

18
Q

Investment -
Earning per share

A

Earning available to ordinary shareholders / Number of ordinary shares in issue

19
Q

Price/ Earnings ratio (P/E)

A

Market value per share/ Earnings per share

20
Q

Net profit margin profit

A

Net profit / Net sales

21
Q

Dividend

A

Previous year retained earnings + Current year net profit - Current year retained earnings

Financial Accounting (11 decks)

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