Finance Formulas (A2) Flashcards
(33 cards)
Revenue
Price x Quantity
Cost of Sales
Opening inventory (Stock) + Purchases - Closing inventory
Gross Profit
Revenue - Cost of sales
Net Profit (Operating profit or Profit from operations)
Gross profit - expenses
Profit before Tax
Operating Profit - Interest (loans)
Profit for the year
Profit before tax - tax
Gross profit margin
Gross profit / sales revenue x 100
Operating profit margin
Operating profit / sales revenue x 100
ROCE (return on capital employed)
Net profit / capital employed x 100
Net book value
Asset worth - depreciation
CR (current ratio)
Current assets / current liabilities
AR (Acid ratio)
(current assets - stock) / current liabilities
Net realisable value
the amount inventory can be sold at - cost of selling it
Straight line Depreciation
[Historical Value (Original cost of asset) - expected residual value] / Expected useful life of asset (in years)
Inventory turnover ratio
Cost of gods sold / Average inventory
Day sales in trade receivables
(Trade accounts receivable / Credit sales) x 365
Trade payables turnover (in days)
(Trade payables / Credit purchases) x 365
Gearing ratio with non-current liabilities
( non-current liabilities / capital employed ) x 100
Gearing ratio with Long term debt
( Long term debt / Shareholders equity ) x 100
Gearing ratio with Total debt
( Total debt / total assets ) x 100
Dividend Yield
(Dividend per share / current market share price ) x 100
Dividend per share
Total annual dividends / Total number of issued shares
Dividend cover
Profits for the year / Annual dividends
Price earnings ratio
Current market share price / earnings per share
