L9 | Financial Statement Analysis Flashcards
1
Q
What is the Return on Capital Employed formula?
A
Profit before interest and tax / capital employed
% answer
2
Q
What is the asset turnover formula?
A
Revenue / Net Assets
Numerical value answer
3
Q
What is the net profit margin formula?
A
Profit before interest and tax / Revenue
% answer
4
Q
What is the gross profit formula?
A
= gross profit / revenue
% answer
5
Q
What is the gearing ratio formula?
A
Debt / Equity
% answer
6
Q
What is the purpose of ratio analysis?
A
a deeper analysis, compared to ‘eyeballing’ the statements
7
Q
What does a ratio do?
A
measures the relationship which exists between two (or more) figures shown in financial statements
