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4.2 Management Accounting: Decision & Control > Ratios - Quick Fire > Flashcards

Ratios - Quick Fire Flashcards

1
Q

Asset Turnover (No of times)

A

(Tot Ass - Curr Liab)
(NCA + Net CA)

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2
Q

Sales - (Cost of Materials + Cost of Bought-in Svs)

A

Value Added

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3
Q

Operating (Net) Profit Margin

A

Sales

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4
Q

Debt to Equity Ratio

A

(Ord Share Cap + Reserves)

*Not debentures which is liability

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5
Q 
Unfulfilled Orders (Units) 
--------------------------                     x 12
Annual Sales (Units)
A

Average delay in completing an order in months

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6
Q

Sales

A

Gross Profit Margin

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7
Q

Debt + Equity

Watch out for eg.
Preferential shares 8% (presume the 8% is a dividend)
Need to find out a bit more about this

A

Gearing Ratio

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8
Q

Sales

A

Advertising Cost as a % of Turnover

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9
Q

(Ordinary Share Cap + Reserves)

A

Debt to Equity Ratio

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10
Q

Current Ratio

A

Current Liabilities

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11
Q

Receivables Payment Period in Days

A

Credit Sales

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12
Q

(Tot Assets - Curr Liab)
(NCA + Net CA)

A

Asset Turnover (No of times)

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13
Q

Gross Profit Margin

A

Sales

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14
Q

Sales

A

Operating (Net) Profit Margin

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15
Q

Advertising Cost as % of Turnover

A

Sales

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16
Q

Credit Sales

A

Receivables Payment period in Days

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17
Q

Gearing Ratio

A

Debt + Equity

Watch out for eg.
Preferential shares 8% (presume the 8% is a dividend)
Need to find out a bit more about this

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18
Q

Current Liabilities

A

Current Ratio

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19
Q

Capital Employed
(NCA + Net CA)

A

Return on Capital Employed (ROCE)

Remember can be split into profit margin & asset turnover.
(Profit / Sales) x (Sales / Cap Empl (Assets) = ROCE

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20
Q

Current Liabilities

A

Quick Ratio (Acid test)

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21
Q

Value Added

A

Sales - (Cost of Materials + Cost of Bought-in Svs)

22
Q

Quick ratio (Acid test)

A

Curr Liabilities

23
Q

Payables’ Payment period

A

Credit Purchases

24
Q

Budgeted Hrs

A

Capacity Ratio

25
Inventory Turnover (No. of times)
Cost of Sales ------------------- Average Inventory or Cost of Sales ------------------ Closing Inventory
26
Efficiency Ratio
Standard Hrs for Actual Output * 100 ------------------ Actual Hrs worked (do not used Paid hrs if given)
27
Standard Hrs for Actual Output * 100 ---------------------- Budgeted Standard Hrs
Activity Ratio | Production volume ratio
28
``` Concept of Performance Measurement from 4 perspectives: Financial Customer Internal Innovation & Learning ```
Balanced Scorecard
29
Average Inventory * 365 ------------------- Cost of Sales (or closing inventory)
Average age of Inventory (days) also called Inventory Holding Period also Inventory Turnover in Days
30
Standard Hrs for Actial Output * 100 ------------------ Actual Hrs worked (do not used Paid hrs if given)
Efficiency Ratio
31
Average age of Inventory (days) also called Inventory Holding Period also Inventory Turnover in Days
Average Inventory * 365 ------------------- Cost of Sales (or closing inventory)
32
T. Payables * 365 ------------------ Credit Purchases
Payables' Payment period
33
Activity Ratio | Production volume ratio
Standard Hrs for Actual Output * 100 ---------------------- Budgeted Standard Hrs
34
Balanced Scorecard
``` Concept of Performance Measurement from 4 perspectives: Financial Customer Internal Innovation & Learning ```
35
Cost of Sales ------------------- Average Inventory or Cost of Sales ------------------ Closing Inventory
Inventory Turnover (No. of times)
36
Capacity Ratio
Actual Hrs Worked * 100 --------------------- Budgeted Hrs
37
Need to learn also the 'categories' in terms of performance mesures and who they're of interest to??
ie Liquidity Efficiency Profitability
38
Average delay in completing an order in months
``` Unfulfilled Orders (Units) -------------------------- x 12 Annual Sales (Units) ```
39
Return on Capital Employed (ROCE)
Operating Profit (PBI) -------------------------- Capital Employed (NCA + Net CA)
40
Balanced scorecard - which ratios for: Financial
Gross Profit % Operating Profit % ROCE Added Value
41
Balanced scorecard - which ratios for: Customer
Delivery Times (or Order Backlogs) Repeat Orders Sales returns as a % of Net sales
42
Balanced scorecard - which ratios for: Internal
Added Value Cost of Quality Reject Rates Sales Returns (due to quality issue) as a % of Net Sales
43
Balanced scorecard - which ratios for: Innovation & Learning
R & D Expenditure (or as %) Revenue from New Products (or as %)
44
Current ratio & Quick ratio (acid test) | Good for?
If analysing balance sheet w/o access to management information it is customary to calculate these 2 as indicators of the company's ability to 'pay it's way' - ie. LIQUIDITY
45
Inventory holding period in days | Higher number of days is good or bad?
Bad (Taking longer to sell)
46
Working capital?
Net current assets | Current assets minus current liabilities
47
Flexible budgeting is a form of 'What If' analysis
.
48
Interest cover ratio
Operating profit ____________ interest same period If profit is negative the interest cover figure is often stated as zero
49
Operating profit ____________ interest same period
Interest cover ratio If profit is negative the interest cover figure is often stated as zero
50
C/S or P/V ratio | Contribution to Sales ratio or Profit volume ratio
Contribution / Selling price (expressed as a number not % ... eg 0.75) Don't forget to use Contribution not Var Costs! Use for calculating BEP FC / C:S (or P:V) = BEP
51
Working Capital Cycle
Inventory Days + Receivable Days - Payable Days
52
Idle time ratio
Idle hours (Paid - actual) -------------------- Paid hours

4.2 Management Accounting: Decision & Control (15 decks)

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