Ratios Flashcards
Current Ratio (ability to cover short term current liabilities)
Current assets / current liabilities
Acid Test Ratio
Current assets - stock / current liabilities
Gross profit margin (profitability of business compared to its sales/capital invested)
Gross profit (revenue - direct costs) / sales revenue x 100
Net profit margin
Net profit (gross profit - indirect costs) / sales revenue x 100
Return on capital employed (ROCE)
Operating profit / total equity + non current liabilities x 100
Return on equity
Operating profit / total equity x 100
Gearing (high = lots of debt low = lots of equity)
Non current liabilities / total equity + non current liabilities [capital employed] x 100
Interest Cover
Operating profit / interest payable
Receivables (debtor days)
Trade receivables (debtors) / sales revenue x 365
Payables (creditor days)
Trade payables (creditors) / cost of sales x 365
Asset Turnover (higher = better) - how well it can turn assets into sales
Sales revenue / Net assets ( assets - liabilities)
Stock turnover
Cost of sales / stock
Dividend per share
Total dividends paid / number of shares issued
Dividend Yield
Dividend per share [total dividend/total shares issued] / share price
Dividend Cover
Profit after tax / dividends
