Ratios Flashcards
What is the Gross Profit Percentage?
Gross Profit / Revenue * 100
What is the Operating Profit Margin?
Profit from Operations / Revenue * 100
What is the Expense Revenue Percentage?
Specified Expense / Revenue * 100
What is the Return on Capital Employed Ratio?
Profit from Operations / Long Term Liabilities + Total Equity * 100
(“Capital Employed” as shown in the denominator is the sum of shareholders’ equity and debt liabilities; it can be simplified as (Total Assets – Current Liabilities).)
What is the Return on Shareholders Funds Ratio?
Profit after Tax / Total Equity * 100
What is Inventory Turnover Ratio?
Cost of Sales / Year End Inventory
What is Inventory Holding Period?
Inventory / Cost of Sales * 365
What is Receivables Collection Period?
Receivables / Revenue * 365
What is the Payables Payment Period?
Payables / Cost of Sales * 365
What is the Working Capital Cycle?
Inventory Days + Receivable Days - Payable Days
(The working capital cycle (WCC) is the amount of time it takes to turn the net current assets and current liabilities into cash.)
What is Total Asset Turnover?
Revenue / Total Assets
(The ratio of the value of a company’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.)
What is Nett Asset Turnover?
Revenue / Total Assets - Current Liabilites
(The ratio of the value of a company’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.)
What is the Current Ratio?
Current Assets / Current Liabilities (2:1)
(The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months.)
What is the Acid Test Ratio?
Current Assets - Inventory / Current Liabilities (1:1)
(In finance, the Acid-test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately.)
What is the Gearing Ratio?
Non-Current Liabilities / Total Equity + Non Current Liabilities * 100
(Gearing ratio refers to the fundamental analysis ratio of a company’s level of long-term debt compared to its equity capital.)
