Ratio Formulas Flashcards
Return on Capital employed =
Profit from operations/
Total Equity + Non-current liabilities x 100
Return on Shareholders funds=
Profit after tax / Total equity x100
Gross Profit percentage =
Gross profit / revenue x100
Expense/ revenue percentage =
Specified expense / revenue x 100
Operating Profit percentage =
Profit from operations / revenue x100
Current Ratio =
Current assets / current labilities x :1
Quick or “Acid” Ratio
Current assets -inventories/
Current liabilities x :1
Inventory Turnover =
Cost of sales/ inventories x times
Inventory Holding period=
Inventories/ cost of sales x 365 days
Trade receivables collection period
Trade Receivables/ Revenue x 365 days
Trade payables payment period
Trade payables/ Cost of sales x 365 days
Working capital cycle=
Inventory days + receivables days - payable days
Asset Turnover (net assets)
Revenue /
Total assets - current liabilities x times
Asset Turnover (non-current assets)
Revenue/
Non-current assents x times
Gearing =
Non-current liabilities/
Total equity + non-current liabilities x100
