Ratios Flashcards
Return on Capital Employed
(Operating profit)/(Share Capital + Reserves + Non-Current Liabilities)
Return on Equity
(Profit for the year - Dividends)/(Share Capital + Reserves)
Operating Profit Margin
Operating Profit / Sales Revenue
Gross Profit Margin
Gross Profit / Sales Revenue
Mark-Up
Gross Profit / COS
Inventory Days
(Average Inventories Held / Cost of Sales) x 365
Receivables Days
Average Trade Recievables / Credit sales
Payables days
(Average trade payables / Credit purchases) x 365
Net Asset turnover ratio
Sales Revenue / Share Capital + reserves + Non-current liabilities
Operating cash cycle
Average inventories holding period + Average settlement period for Recievables - Average payment period for payables
Liquidity
Short-term ability to generate cash for working capital needs and immediate debt repayments
Solvency
Long-term ability to generate cash internally or externally to satisfy capacity needs, fuel growth and repay debts
Current ratio
Current assets / current liabilities
Acid test ratio
(Current assets - Inventory)/Current liabilities
Cash ratio
Operating cash flows / current liabilities