Finance-Ratio Analysis

Finance-Ratio Analysis

1. Liquidity Ratios

   • Current Ratio- Current Assets:Current Liabilities
   • Acid Test Ratio- Liquid Assets:Current Liabilities

2. Profitability Ratios

   • ROCE: Operating Profit / Total Equity + Non-current liabilities
   • Net Profit Margin: Net Profit/Revenue x 100 = %
   • Gross Profit Margin: Gross Profit/Revenue x 100 = %

3. Gearing Ratios

   • Non-Current Liabilities/Total Equity + Non-Current Liabilities (Capital Employed) x 100

4. Shareholders Ratios

   • Dividend per share: Total Dividends/number of issued ordinary shares
   • Dividend Yield: Ordinary share dividend (in pence) / current market price (in pence) x 100

5. Financial Effiiciency Ratios

   • Asset Turnover: Revenue / Net Assets
   • Inventory (stock) turnover : Cost of Sales / Average inventories (stock) held