Ratios

Question 1

Return on Assets

Answer 1

Profit before interest and tax (*) / Average Total Assets

Question 2

Profit Margin

Answer 2

Profit before interest and tax (*) / Sales (revenue)

Question 3

Gross Profit Margin

Answer 3

Gross Profit / Sales

Question 4

Asset Turnover

Answer 4

Sales (revenue) / Average Total Assets

Question 5

Return on Equity

Answer 5

Profit (surplus) / Average Total Equity

Question 6

Earnings per Share (EPS)

Answer 6

Profit (surplus) / Average Ordinary Shares Issued

Question 7

Current Ratio

Answer 7

Current Assets / Current Liabilities

Question 8

Acid (Quick) Ratio

Answer 8

Current Assets - Inventory(*) / Current Liabilities

Question 9

Gearing Ration

Answer 9

Debt OR Equity / Total Assets

Question 10

Interest Coverage

Answer 10

EBIT / Interest Expense

Question 11

Day’s Debtor’s

Answer 11

Average AR * 365 / Sales Revenue

Question 12

Day’s Inventory

Answer 12

Average Inventory * 365 / COGS

Question 13

Debtor’s Turnover

Answer 13

Sales Revenue / Average AR

Question 14

Inventory Turnover

Answer 14

COGS / Average Inventory

Question 15

Prefered Current Ratio

Answer 15

Greater than or equal to 2.0

Question 16

Preferred Gearing Ration (Debt / Assets)

Answer 16

< 66 %