ratios Flashcards
1
Q
Return on Capital Employed
A
Profitability
net profit / capital employed
2
Q
Gross Profit Margin
A
Profitability
gross profit/ sales revenue
amount of gross profit made for every dollar of product sold, not accounted for your expenses
3
Q
profit margin
A
Profitability
net profit/sales revenue
amount of profit made of every dollar of product sold
4
Q
Current Ratio
A
Liquidity
current assets / current liabilities
1.5 - 2
5
Q
Acid Test Ratio
A
Liquidity
1 - 1.5
current assets - stocks / current liabilities
what you owe and own on short term basis, more telling
6
Q
break even
A
fixed costs/sales - variable costs
7
Q
safety margin
A
current output - break-even output
8
Q
working capital
A
current assets - current liabilities
finance needed for day2day
