formulas

Question 1

What is the formula for Gross Margin?

Answer 1

Gross Margin = Gross Profit ÷ Sales

Question 2

What is the formula for EBITDA Margin?

Answer 2

EBITDA Margin = EBITDA ÷ Sales

Question 3

What is the formula for Operating Margin?

Answer 3

Operating Margin = Operating Profit ÷ Sales

Question 4

What is the formula for Profit Before Tax Margin?

Answer 4

Profit Before Tax Margin = Profit Before Tax ÷ Sales

Question 5

What is the formula for Return on Equity (ROE)?

Answer 5

Return on Equity (ROE) = Profit After Tax ÷ Shareholder’s Equity

Question 6

What is the formula for Return on Capital Employed (ROCE)?

Answer 6

ROCE = Operating Profit ÷ (Shareholder’s Equity + Debt)

Question 7

What is the formula for Current Ratio?

Answer 7

Current Ratio = Current Assets ÷ Current Liabilities

Question 8

What is the formula for Quick Ratio (Acid Test)?

Answer 8

Quick Ratio = (Current Assets − Stock − Prepayments) ÷ Current Liabilities

Question 9

What is the formula for Total Asset Turnover?

Answer 9

Total Asset Turnover = Annual Sales ÷ Average Total Assets

Question 10

What is the formula for Operating Expenses to Sales (Operating Ratio)?

Answer 10

Operating Expenses to Sales = Operating Expenses ÷ Sales

Question 11

What is the formula for Debt to Capital Ratio?

Answer 11

Debt to Capital Ratio = Debt ÷ Capital Employed

Question 12

What is the formula for Debt to Equity Ratio?

Answer 12

Debt to Equity Ratio = Debt ÷ Shareholder’s Equity