Business Calculation Flashcards by Cole Hamer

Q

Gross Profit Margin calc & ideal value

A

Gross Profit / Revenue x 100

Aim for a high value to show profitability

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Q

Operating (net) profit margin calc

A

operating profit / revenue x100

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Q

Return on capital employed calc

A

operating (net) profit / capital employed x100

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Q

current ratio calc & ideal value

A

current assets / current liabilities

ideal value is 1.5:1

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Q

Gearing calc & ideal value

A

long-term liabilities/ capital employed x100

ideal range is 20 - 30%

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Q

Payables calc & ideal value

A

payables / revenue x365

ideal value to be low

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Q

receivables calc & ideal value

A

receivables / revenue x365

ideal value should be low

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Q

inventory turnover calc & ideal value

A

inventory / cost of sales x365

ideal value should be high

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Q

A

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