Profit&loss&ratios (finish for summer) Flashcards
1
Q
How do you work out the working capital?
A
Current assets- current liabilities
2
Q
What is the equation for working out the current ratio?
A
Current assets/current liabilities
3
Q
What is the equation for the acid test ratio?
A
Current assets- stock/current liabilities
4
Q
What is depreciation?
A
It is an estimate of how much the value of fixed assets have fallen since they were purchased
5
Q
How do you work out depreciation?
A
Original asset value- residual value/ number of years the asset is owned
6
Q
What is working capital?
A
Money that is left aside for the day to day running of the business if they should fall short
