Flashcards
Financial Performance Ratios
Cards in this deck (18)
- 1Profitability Ratios are ...Return on Capital Employed
Return on Shareholder's Funds
Operating Profit Margin
Gross Profit Margin
Operating Expenses to Sales - 2Efficiency Ratios are ...Sales Revenue on Capital Employed
Sales Revenue on Non Current Assets
Sales Revenue on Working Capital
Inventory Holding Period
Settlement Period for Trade Receivables
Settlement Period for Trade Payables - 3The ROCE is the business' ability to ...... generate profit from operations from total amount of capital used
ROCE = OPM * SROCE - 4The ROSF is the business' ability to ....... generate profit from Shareholder's Equity
- 5The OPM is the business' ability to ....... convert sales revenue into operation profit
- 6The GPM is the business' ability to ....... convert sales revenue into gross profit
- 7The OE:S is the proportion of ....... Sales Revenue consumed by Operating Expenses
- 8Capital Employed is equal to ...Total Assets - Current Liabilities
- OR -
Non-Current Assets plus (Current assets - Current liabilities) [Operating perspective]
- OR -
Non-Current Liabilities + Equity [financing perspective] - 9The SROCE is the business' ability to ....... generate sales revenue from total capital used
- 10The Sales Revenue on Non-Current Assets is the business' ability to ....... generate sales from its investment in non-current assets
- 11The Sales Revenue on Working Capital is the business' ability to ....... generate sales from investment in working capital
- 12The Inventory Holding Period is the number of days ....... of cost of sales represented by year end inventories
- 13The SPfTR is the number of days ....... of sales revenue (/sales revenue on credit) represented by year end trade receivables
- 14The SPfTp is the number of days ....of cost of sales (/purchases) represented by year end trade payables
- 15Working Capital is equal to ...Current Assets - Current Liabilities
- 16Key Operating Items are ... Aim for Working Capital is to be ... as possible... Inventory, Receivables and Payables
Aim for Working Capital is to be as low as possible - 17The Working Capital Cycle is equal to ...(Inventory Holding Period + Settlement Period for Trade Receivables) - Settlement Period for Trade Payables
- 18Working Capital is important as ...Lengthy of time to pay suppliers is shorter than length of time to receive cash from clients therefore business operations need to be financed accordingly
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- Bachelors Degree Introduction to Accounting (Unit 3 - Interpreting Financial Statements) Flashcards on Financial Performance Ratios, created by Jorden Allcock on 07/03/2016.
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- Jorden Allcock
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