Unit 3 Accounting Flashcards
Working capital
Current assets - current liabilities
Current ratio
Current assets / current liabilities
Acid test ratio also known as liquid capital ratio
(Current assets - stock) / current liabilities
Gross profit margin
(Gross profit / sales revenue) X 100
Net profit margin
(net profit / sales revenue) X 100
ROCE
(Net profit / capital employed) x 100
Productivity equation
Total output / number of workers
Types of Owner ship
Sole trader ( owner by himself)
Partnership
Private limited company or public limited company
What are the 5 steps of analysing data
1 define the problem 2 collect the data 3 analyse the data 4 present the results 5 draw a conclusion
Breaking even point
Fixed cost / contribution (selling price - variable cost)
Net profit
Gross profit - expenses
Gross profit
Sales revenue - cost of sales
Contribution per unit formulae
Selling price - variable cost per unit
Total contribution
Contribution per unit x number of units sold
Margin of safety
Sales - breaking even level of output
Straight line depreciation
Annual depreciation = asset purchase price - estimate salvage value / estimated useful life of asset
Trade receivable days
(Trade receivables / crest sales ) X 365
Trade payable days
(Trade payables / Credit purchases) x 365
Inventory turnover
(Average inventory / cost of sale) x 365
