Ratios Flashcards
1
Q
Gross profit ratio
A
Gross profit/sales revenue x 100
2
Q
POTY ratio
A
POTY/Sales Revenue x 100
3
Q
Return on equity ratio
A
POTY/Opening Equity x 100
4
Q
Current Ratio
A
Current assets / Current liabilities
(2:1)
5
Q
Acid Test Ratio
A
Current Assets - Closing Inventory/Current liabilities
6
Q
Trade Receivables Collection Period Ratio
A
Trade Receivables/Credit sales x 365
7
Q
Trade Payables Payment Period Ratio
A
Trade Payables/credit purchases x 365
8
Q
Rate of Inventory Turnover ratio
A
Cost of sales/average inventory
9
Q
Average inventory
A
Opening Inventory +Closing Inventory/2
10
Q
Cost of Sales
A
Sales rev - Gross Profit
11
Q
Expenses Ratio
A
Expenses/sales revenue x 100
12
Q
Expenses
A
Gross Profit - POTY
