Ch.23- Analysis of accounts Flashcards

1
Q

Gross profit margin %

A

Ration between gross profit and revenue

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2
Q

Profit margin %

A

Ration between profit before tax and revenue

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3
Q

Adding value

A

Selling a product for more than it cost to produce it

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4
Q

Return on capital employed (ROCE)

A

Ratio between profit before tax and capital employed

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5
Q

Liquidity

A

The ability of a business to pay its short-term debts

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6
Q

Current ratio

A

Ratio between current assets and current liabilities

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7
Q

Acid test ratio

A

Ratio between liquid assets and current liabilities

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