Ratios Flashcards
(8 cards)
1
Q
ROCE
A
Operating profit / Capital employed
2
Q
Capital employed
A
Non current liabilities + total equity
3
Q
Gross profit margin
A
Revenue - costs of goods / revenue
4
Q
Operating profit margin
A
Operating profit / revenue x100
5
Q
Current ratio
A
Sees if a business has sufficient working capital to pay short term debts
Current assets / current liabilities
6
Q
Gearing
A
Shoes how much a firm equity is borrowed
Non current liabilities/ total equity + non current liabilities (capital employed)
7
Q
Receivable days
A
Time it takes for business to collect debt owed
Receivables / revenue x365
Shorter time = faster cash flow
8
Q
Payable days
A
How long business takes to pay creditors
Payables / cost of sales x365
Longer time = longer the company retains cash in the business
