Ratio Flashcards
List the profitability ratio
- ROE
- ROCE
- Net operating profit margin
- gross profit margin
- expense/revenue percentage
List Efficiency ratios
- Asset turnover
- NCA turnover
- Return on total assets
List liquidity and working capital ratios
- Current Ratio
- quick/acid test
- Average inventory turnover period/inventory days
- Average inventory turnover
- Trade receivable days
- Trade payables days
- Working capital cycle
List financial gearing ratios
- Gearing
2. Debt/Equity
List investment ratios
- Interest cover
- Dividend cover
- Dividend yield
- EPS
- PE
ROE formula
(Profit for the year - preference dividend)/
(Ordinary share capital + reserves) x 100
ROCE formula
Profit from operations (PBIT) /
(Total assets – current liabilities) x 100%
or Total equity + non-current liabilities
Net / operating profit margin
Profit from operations /
Revenue x 100%
Gross profit margin formula
GROSS PROFIT / REVENUE x 100
Expense/revenue percentage
Specified expense/revenue x 100
Asset turnover formula
Revenue /
Total assets – current liabilities
= £ or times
OR
Revenue/
(equity + non current liabilities)
Non-current asset turnover formula
Revenue /NCA
= no. of times
Asset turnover formula
Revenue / total assets
= X times
Return on total assets formula
Profit from ops/ TA x 100
Current ratio formula
CA/CL
= X:1
Quick/acid test formula
(CA-Inv)/CL
= X:1
Average inventory turnover period formula
Av inv/COS x365
= no.of days
Average inventory turnover formula
COS/av inv
= X times
Trade receivables days formula
Trade receivables/revenue x 365
Trade payable days formula
Trade payables/purchases x 365
NB may not have purchases so could be cos
Working capital cycle formula
Inv days+ receivable days - payable days
Gearing formula
NCL/Total eq+ NCL . x 100
Deb/equity formula
(preference shares+ long term loans)/shareholder funds . x100
Interest cover formula
profit from ops/finance costs . = X times
Dividend cover formula
net profit after tax and preference div/ordinary div paid and proposed
= X times
Dividend yield formula
Dividend per share/market price per share x 100
EPS formula
Profit after tax and preference dividends/ no of issude ordinary shares
Price/earnings ratio formula
Market price per share/ earnings per share
