Flashcards in Ratio Meaning Deck (20):

1

## Asset Turnover

### Measures how the assets of the business are being utilise to generate revenue.

2

## Acid Test

### A measure of a firm's short term survival i.e its ability to meet short term debts and day to day expenses. How easy they can pay off short term debts with assets

3

## Average Rate of Return

### An investment appraisal technique that calculates average profit as a percentage of the total cost of the initial investment.

4

## Current Ratio

### A measure of a firm's liquidity and short term survival i.e its ability to meet short term debts and day to day expenses

5

## Dividend per Share

### The return paid to the shareholders for each unit of their investment.

6

## Dividend Yield

### Measures the return on a shareholder's investment as a percentage of the current market price.

7

## Float Time

### The amount of extra time available to complete a non critical activity without delaying the project.

8

## Gearing

### A measure of the proportion of a business's capital that is funded through long term loans.

9

## Gross Profit

### Profit after cost of sales has been deducted and before expenses.

10

## Inventory Turnover

### Measures how efficiently a business replaces its stock in a year and hence whether stock is being used efficiently to generate sales.

11

## Moving Averages

### A method of market analysis which shows whether a trend is significant by smoothing out fluctuations.

12

## Net Assets

### The net worth of a business by the balancing of assets against liabilities.

13

## Net Current Assets/Liabilities

### The difference between Current Assets and Current Liabilities.

14

## Net Present Value

### An investment appraisal technique that calculates the total return on an investment taking into account the time value of money.

15

## Net Profit Margin

### A measure of Profitability that looks at operating profit as a percentage of sales revenue.

16

## Payable Day's

### Measures how long on average it takes a business to pay its suppliers it has purchased on credit.

17

## Payback

### An investment appraisal technique that measures how long it would take to pay back the cost of the initial investment.

18

## Receivable Days

### A measure of how long it takes a customer to pay for credit purchases.

19

## ROCE

### A measure of how efficiently a business is using its capital employed to generate profit. High figure better.

20