Ratio

Question 1

Capital gearing equation

Answer 1

Non current liabilities
—————————————– ×100
Issued share capital+reserves+NCLs

Question 2

Current ratio equation

Answer 2

Current assets
———————– X:1
Current liabilities

Question 3

Expenses in relation to revenue equation

Answer 3

Expenses
—————— ×100
Revenue

Question 4

Gross profit margin equation

Answer 4

Gross profit
—————— ×100
Revenue

Question 5

Liquid capital ratio equation

Answer 5

Current assets - inventory
————————————– X:1
Current liabilities

Question 6

Gross profit markup equation

Answer 6

Gross profit
—————— ×100
Cost of sales

Question 7

Profit in relation to revenue equation

Answer 7

PFTY (pre tax)
——————— ×100
Revenue

Question 8

Rate of inventory turnover equation

Answer 8

Average inventory

Question 9

Rate of inventory turnover (days) equation

Answer 9

Average inventory
————————— ×365
Cost of sales

Question 10

Return on Capital employed (sole trader) equation

Answer 10

Profit before interest
——————————- ×100
Capital + NCLs

Question 11

Return on Capital employed (Ltd) equation

Answer 11

Operational profit
—————————– ×100
Capital + NCLs

Question 12

Trade payable days equation

Answer 12

Trade payable
—————————- ×365
Credit purchases

Question 13

Trade receivable days equation

Answer 13

Trade receivables
————————— ×365
Credit sales