Ratios

Question 1

ROCE

Answer 1

Operating profit / share capital + noncurrent liabilities + reserves

Question 2

ROE

Answer 2

Operating profit / share capital + reserves

Question 3

Operating profit margin

Answer 3

Operating profit / sales revenue

Question 4

Mark up

Answer 4

Gross profit / cost of sales

Question 5

Gross profit

Answer 5

Revenue - COS / revenue

Question 6

Inventory days

Answer 6

Average inventories held/COS x 365

Question 7

Receivables days

Answer 7

Average trade receivables / credit sales revenue X365

Question 8

Payables days

Answer 8

Average trade payables / credit purchases X365

Question 9

Net asset turnover

Answer 9

Sales revenue / share capital + reserves + noncurrent liabilities

Question 10

Operating cash cycle

Answer 10

Inventories holding period + receivables days - payables days

Question 11

Current ratio

Answer 11

Current assets / current liabilities

Question 12

Acid test ratio

Answer 12

Current assets - inventory / current liabilities

Question 13

Cash ratio

Answer 13

Operating cash flow / current liabilities

Question 14

Gearing ratio

Answer 14

Non current liabilities / share capital + reserves + noncurrent liabilities

Question 15

Interest cover ratio

Answer 15

Operating profit / interest payable

Question 16

Dividend payout ratio

Answer 16

Dividends announced / net income - preference dividend

Question 17

Dividend yield

Answer 17

Dividend per share / market value per share

Question 18

Earnings per share

Answer 18

Net income - preference dividend / ordinary shares in issue

Question 19

P/E ratio

Answer 19

Market value per share / earnings per share

I.e market cap / net income