Profitability Measures

Question 1

ROCE (Return on capital employed)

Answer 1

Profit from Operations / capital employed x 100%

Question 2

Return on shareholders funds

FSLC,PDSY

Answer 2

Profit after tax / Total Equity X 100%

Question 3

Specified expense as a % of revenue

FSLC, PDSY

Answer 3

Specified expenses / Revenue x 100%

Question 4

Capital Employed

Answer 4

Total equity + non current liabilities
Or
Working Capital + Non-Current assets

Question 5

Gross Profit Percentage

Answer 5

Gross Profit / Sales Revenue x 100%

Question 6

Profit Margin

Answer 6

Profit / Sales revenue x 100%

Question 7

Operating profit percentage (FSLC, PDSY)

Answer 7

Profit from operation / Revenue x 100%

Question 8

Administration cost as a percentage of turnover (MDCL)

Answer 8

Cost / Revenue x 100%

Question 9

RONA (Return on net assets)

Answer 9

Profit from operations / Net assets x 100%

Question 10

Contribution margin

Answer 10

Contribution = revenue - variable costs

Question 11

Break even

Answer 11

Fixed cost / contribution

Question 12

Margin of safety

Answer 12

Budgeted sales - break even / budgeted sales x 100