Accounting equations Flashcards
(50 cards)
Gross profit margin
Gross profit/revenue
Operating profit margin
Operating profit/revenue
Return on Equity
Profit before tax/shareholders’ equity
net return on equity
net profit/shareholders’ equity
Return on capital employed
Profit before interest and tax/(shareholders’ equity + long term borrowings)
current ratio
current assets/current liabilities
Quick (acid test) ratio
(current assets - inventory)/current liabilities
Non-current asset turnover ratio
revenue/non-current assets
Inventory turnover
cost of sales/average inventory
average inventory
(opening + closing inventory)/2
Inventory turnover in days
cost of sales/average inventory x 365 days
Trade receivables in days
trade receivables/revenue x 365 days
Trade payables in days
trade payables/cost of goods sold x 365 days
dividend per share
dividend for the year/number of shares in issue
earnings per share
net profit/number of shares in issue
price/earnings ratio
price per share/earnings per share
gearing
debt/equity
interest cover
profit before interest and tax/interest
breakeven when?
total revenue = total costs
y = mx + c
y = total costs, m = cost per unit, x = output, c = fixed costs
contribution per unit
price per unit - variable costs per unit
number of units at break even
fixed costs/contribution per unit
sales volume to reach required profit level
(fixed costs + required profit)/unit contribution
margin of safety
budgeted sales volume - break even sales volume
