Formulae for Financial Ratios (Buss 3)

Description

The financial ratios needed for Buss 3 paper
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Flashcards by jakeyboihc, updated more than 1 year ago
jakeyboihc
Created by jakeyboihc about 8 years ago
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Resource summary

Question Answer
Current Ratio current assets : current liabilities
Acid Test Ratio liquid assets : current liabilities Where liquid assets are current assets - inventories (stock)
Return on capital employed % (ROCE) operating profit / total equity + non current liabilities** X 100 **Where this equals capital employed
Asset Turnover revenue / net assets
Inventory (stock) turnover cost of sales / average inventories (stock) held
Payables (Creditors) days (Payables collection period) Payables* / coat of sales X 365 *Payables = creditors in this formula
Receivables (Debtors) days (Receivables collection period) recievables* / revenue X 365 *receivables = debtors through this formula
Gearing Non-current liabilities / total equity + non current liabilities* *where this = capital employed
Dividend per share (in pence) Total dividends / number of issued ordinary shares
Dividend yield (%) Ordinary share dividend (in pence) / current market price (in pence) X 100
Operating Profit Margin Operating profit / revenue x 100
Gross Profit Margin Gross Profit / revenue x 100
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