theme 3 Formulas Flashcards
total capital employed
Total equity + non current liabilities
Gearing ratio
Non current liabilities /total capital employed x100
Low = less than 30%
High more than 60 high business risk
Return on capital employed ROCE
operating profit / total capital employed x100
Higher the better
Absenteeism rate
Total absent per period / ave number employed per period
X100
Labour turnover
Total number of rod employees leaving per period / average employees per period x
100
Labour retention
Total number employees remaining per period / age number of employees per period x100
3 month moving average
For feb - jan+feb+march /3
Pay back period
How long it takes for the money back invested
Average annual profit
Total returns - investment cost/ project life
Average rate of returns
Average annual profit / investment cost x100
Net present value
Times discount by returns add them up and minus investment cost
