Ratios Flashcards
Correct calculation for capital employed to be used in ROCE?
Shareholder’s funds + long-term liabilities
Total assets - current liabilities
Gross profit margin?
Gross profit/Sales * 100
Operating margin?
PBIT/Sales * 100
ROCE?
PBIT/Capital employed * 100
OR
Operating Profit margin * asset turnover
Sales/capital asset turnover ratio
ROE?
(Profit after tax - preference dividends)/Ordinary shareholder funds * 100
Asset turnover?
Sales/Capital employed
Current ratio?
Current assets/Current liabilities
Quick ratio?
(Current assets - Inventory)/Current liabilities
Receivables collection period?
Average AR/Annual credit sales * 365 days
Payables payment period?
Average AP/Annual credit purchases * 365 days
Inventory holding period?
Average inventory/Annual COS * 365 days
Operating cycle?
Inventory + Receivables - Payables
Sales/working capital?
Sales/working capital
Debt to equity?
Non-current liabilities/(Capital + reserves) * 100
Debt to total capital?
Non-current liabilities/Capital employed * 100
Operational gearing?
Fixed operating costs/Variable operating costs * 100
Fixed operating costs/Total operating costs * 100
Contribution/PBIT
Interest coverage?
PBIT/Interest expense
Cash flow coverage?
Cash generated from operations/Interest expense
EPS?
Profit after tax-preference dividends/Weighted average number of ordinary shares in issue
Diluted EPS?
(Profit after tax-preference dividends + FDS adjustments) / (Ordinary dividend + PDS)
P/E ratio?
Ordinary share price/EPS
Dividend coverage?
Profit after tax-preference dividends / total rodinary dividend
Dividend payout ratio?
Ordinary dividend / Profit after tax-preference dividends
Dividend yield?
Dividend per share/Market price per share * 100
Earnings yield?
EPS / Ordinary share price * 100
Total shareholder return?
(Year end share price - share price at start of year + dividends for year) / Share price at start of year (old price) * 100
((Current share price + dividend for year)/share price at start of year) - 1
Dividend for the year?
Interim dividend + final dividend
Ex-div share price?
Cum-div - final dividend
Benefit of high operational gearing (risk v reward)?
Greater risk but greater reward
Contribution calculation?
Sales - variable costs
Proportion of debt finance?
Debt/(Debt + Equity)
Mean growth in EPS calcualtion?
n¬(final year/start year) - 1
Is dividend coverage and dividend payout workings numerator and denominator flipped?
YES
