Flashcards
Interpreting Financial Statements
Flashcards do conjunto (19)
- 1Interpreting Financial StatementsLiquidity
Profitability
Financial Position
Use of Resources - 2Interpreting Financial Statements Liquidity Current RatioCurrent Assets
_______________ = X : 1
Current Liabilities
Measures relationship between current assets and current liabilities - 3Interpreting Financial Statements Liquidity Quick Ratio or "Acid Test Ratio"Current Assets-Inventories
________________________ = X : 1
Current Liabilities
Test of immediate solvency- gives clear indication of health of a companies finance - 4Interpreting Financial Statements Financial Position Interest CoverProfit from Operations
_____________________ = X Times
Finance Costs
Assesses the safety margin cover of profit over its finance costs - 5Interpreting Financial Statements Financial Position GearingN-C Liabilities
________________________ X100
Total Equity + N-C Liabilities
Ratio looks at whether company can pay its way in short term
Looks at companies long term stability - 6Interpreting Financial Statements Profitability Return on Capital Employed (ROCE)Profit from Operations
__________________________ X 100
Total Equity + N-C Liabilities
Expresses the profit in relation to capita; employed
(Most effective ratio when interpreting accounts) - 7Interpreting Financial Statements Profitability Return on Total AssetsProfit from Operations
__________________ X 100
Total Assets - 8Interpreting Financial Statements Profitability Return on EquityProfit after Tax
_______________ X 100
Total Equity - 9Interpreting Financial Statements Profitability Gross Profit PercentageRevenue - Cost of Sales
_____________________ X 100
Revenue
Expresses gross profit margin as % in relation to revenue - 10Interpreting Financial Statements Profitability Expense / Revenue %Specified Expense
___________________ X 100
Revenue
Expense expressed as a % over revenue
(compared year on year) - 11Interpreting Financial Statements Profitability Operating Profit %Profit from operations
_______________________ X 100
Revenue
(Operating Profit- profit before finance costs and tax) - 12Interpreting Financial Statements Use of Resources Inventory TurnoverCost of Sales
____________ = X Times
Inventories
Shows number of times in a year inventory is turned over - 13Interpreting Financial Statements Use of Resources Inventory Holding PeriodInventories
__________ x 365 Days = X Days
Cost of Sales
Shows number of days inventories are held on average - 14Interpreting Financial Statements Use of Resources Trade Receivables Collection PeriodTrade Receivables
_____________ x 365 = Days
Revenue
Shows how many times on average trade receivables take to pay for goods sold by the company - 15Interpreting Financial Statements Use of Resources Trade Payables Payment PeriodTrade Payables
______________ x365 = Days
Cost of Sales
Measuring days takes to pay trade payables - 16Interpreting Financial Statements Use of Resources Working Capital CycleInventory Days + Receivable Days
- Payable Days
Measures time between payment of good received inventory and collection of cash from customers from goods sale - 17Interpreting Financial Statements Use of Resources Asset Turnover (Total Assets)Revenue
_____________ = X Times
Total Assets
Show efficiency in use of assets in generating revenue - 18Interpreting Financial Statements Use of Resources Assets Turnover (Net Assets)Revenue
_________________ = X Times
TotalAssets - CurrentLiabilities
Show efficiency in use of Net assets in generating revenue - 19Interpreting Financial Statements Use of Resources Assets Turnover (N- C Assets)Revenue
_____________ = X Times
N-C Assets
Show efficiency in use of N-C Assets in generating revenue
Informações
- Descrição
- Level 4 AAT FlashCards sobre Interpreting Financial Statements, criado por Gemma Doney em 07-10-2015.
- Criado por
- Gemma Doney
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