Interpretation Of Statemements Flashcards
What does EBITDA stand for
Earnings before interest tax depreciation and amortisation
What do we want to know regarding statements?
How the business has performed in the past
Understanding the entity and assessing risk
How do we expect the business to perform in the future
What is vertical analysis
Common sizing- express figures as a percentage of another
What is horizontal analysis?
Percentage change between periods- trends
What is the formula for gross profit
Gross profit/ revenue x 100
What is the formula for operating profit
Operating profit/ revenue x 100
What is the formula for ROCE
PBIT/ debt+equity
What is ROSF formula
Profit before distribution to shareholders/ equity
What is the formula for asset turnover
Total sales revenue/ net assets
What is non current asset usage
Total sales/ non current assets
What is inventory holding period?
Average inventory/ cogs x 365
What are average trade receivables
Average trade receivables/ credit sales x 365
Payables days
Average trade payables/ total credit purchases x 365
What is the formula for current ratio and acid test ratio
Current assets/ current liabilities
Current assets- inventory/ current liabilities
What is the hearing formula
Debt/ debt and equity’s -100
