Liquidity & Profitability Ratios

Question 1

What is the formula for the current ratio?

Answer 1

Current Assets/Current Liabilities:1

Question 2

What is the formula for the Liquid Capital ratio?

Answer 2

Current Assets - Inventory/ Current Liabilities

Question 3

What is the formula for the gross profit margin?

Answer 3

(Gross Profit/ Revenue) x 100 = x%

Question 4

What is the formula for the markup?

Answer 4

(Gross Profit/Cost of sales) x 100 = x%

Question 5

What is the formula for Expenses in relation to Revenue?

Answer 5

(Expenses/Revenue) x 100 = x%

Question 6

What is the formula for profit in relation to revenue?

Answer 6

(Profit for the year before tax/Revenue) x 100 = x%

Question 7

What is the formula for the Return on Capital Employed?

Answer 7

(Profit from operations/Capital Employed) x 100 = x%