BUSS3 Formula...

loz95
Mind Map by , created over 5 years ago

Mind Map on BUSS3 Formula..., created by loz95 on 02/23/2014.

154
1
0
Tags No tags specified
loz95
Created by loz95 over 5 years ago
Sociology: Crime and Deviance Flash cards
Beth Morley
GCSE REVISION TIMETABLE
gracemiddleton
Mind Maps with GoConqr
Manikandan Achan
The Periodic Table
asramanathan
Les Aliments
dAnn dAnn
Chemistry Regents - Bonding Theories and Polar Bonds Notes
Ali Kane
FCE Practice Quiz - B2
Christine Sang
History of Psychology
mia.rigby
GCSE Chemistry C2 topic notes
imogen.shiels
BIOLOGY HL DEFINITIONS IB
Luisa Mandacaru
BUSS3 Formula...
1 Current Ratio
1.1 Liquidity ratio
1.2 A current ratio between 2 and 3 is ideal
1.3 Less than 2 may have liquidity problems more than 2 means has too much money in current assets - opportunity cost.
1.4 Current Assets / Current liabilities
2 ACID test
2.1 Liquidity ratio
2.2 Is a tougher test to see business ability to pay bills.
2.3 Depends on business a figure less than one would highlight serious problem
2.4 (Current Assets - Stock)/ Current liabilities
3 Gross Profit Margin
3.1 Profitability Ratio
3.2 Higher the figure the better!
3.3 Only shows profit before overhead costs have been taken.
3.4 (Gross Profit/Sales Revenue) X 100
4 Operating Profit Margin
4.1 Profitability Ratio
4.2 (Operating Profit/ Sales Revenue) X 100
4.3 Highest possible % is preffered here.
4.4 If the % is decreasing the expenses for firm have increased.
5 ROCE

Annotations:

  • Return on Capital Employed
5.1 (Operating profit/Capital employed) X 100
5.2 Profitability Ratio
5.3 Figure needs to be as high as possible
5.4 A low figure could deter investors

Media attachments