Other Ratios Flashcards
Operating Gearing
Fixed Costs / Variable Costs
Contribution to Sales Ratio
Sales Revenue - Cost of Sales /
Sales Revenue x100
Economic Value Added ratio
Operating Profit-
WACC X Opening invested Capital
Economic Value Added ratio
Operating Profit-
WACC X Opening invested Capital
Total Shareholder Return ratio
(Selling Price per Share - Purchase Price of Share) plus Dividends Received/
Purchase Price of Share x100
Market Value Added ratio
Current Market Value of Company - capital
Original investment + increase in value since formation
Free cash flow calculation
Sales-
Operating Costs -
= Net Operating Profit
- tax
- incremental investment in working capital
- incremental investment in non current assets
Annual Equivalent Cost (NPV) ratio
Net Present Value / Annuity Factor x100
What are the 5 methods of investment appraisal?
Payback Discounted Pay Back Internal Rate of Return Accounting Rate of Return Net Present Value
What are the Value Drivers used in Shareholder Value Analysis (6) that create value in the company?
Cost of Capital Capital Expenditure Efficient Tax Planning Sales Growth Invest in working capital Increase profitability
Net Assets Approach to Company Valuation
Assets- Liabilities
Net book valuation
Equity + retained profits
