Analysis And Interpretation

Front 1

Mark-Up %

To determine the relationship between the cost price and mark up on agood or cost of goods sold and gross profit.

Back 1

(Business Name) adds (mark up %) of the cost onto the cost of the goods before the selling price ofthe stationery is calculated.

Front 2

Gross Profit %

This measures the percentage of sales that is left after accounting for cost of goods sold. It shows what proportion of sales is left to cover the business expenses.

NOTE:

(Net Sales = Sales - Sales Returns)

(Gross Profit=Net Sales – COGS)

Back 2

For every $1 of sales, (Business Name) will earn (figure) cents in gross profit. Theremaining (difference) cents is subtracted as the cost of goods sold. The differencebetween the cost of the goods sold and the sales is the amount of mark-up thathas been added to the cost of the goods sold and hence gross profit.

Front 3

Distribution cost %

This is the proportion of revenue (sales/fees) that was used up in providing the service or selling the goods.

Back 3

For every $1 of sales for (Business Name) (figure) cents is distribution costs, for example (name a distribution cost)

Front 4

Administrative Expenses %

This is the proportion of revenue that was used up in administration of the business.

Back 4

For every $1 of sales for (Business Name) (figure) cents is administrative expenses, for example (list an administrative expense)

Front 5

Finance Cost %

This is the proportion of revenue that went into paying interest for obtaining funds for the business.

Back 5

For every $1 of sales for (Business Name) (figure) cents is finance cost, for example (list a finance cost expense)

Front 6

Net Profit %

This means the percentage of sales that remains in the business as profit, after all expenses are accounted for.

Back 6

For every $1 of sales (Business Name) will earn (figure) cents in net profit, the remaining (figure) cents is subtracted as the cost of goods sold and expenses.

Front 7

Current Ratio (This can also be called working capital ratio)

This ratio is a measure of the business’s ability to meet its current debt obligations as they fall due in the next accounting period [the ability of the business to pay for its current liabilities using its current assets].

Back 7

(Business Name) has (figure) of current assets for every $1 of current liabilities to meet his current debts as they fall due in the next 12 months/accounting period. This means that (Business Name) (may/may not) be able to meet his current debts.

Front 8

Liquid Ratio (This can also be known as quick asset)

This ratio is a measure of the business’s ability to meet its immediate debts as they fall due in the next 4 – 6 weeks [the ability of the business to pay for its liquid liabilities using its liquid assets].

Back 8

(Business Name) has (figure) of liquid assets for every $1 of liquid liabilities. This means that (Business Name) (may/may not) be able to meet all of his immediate debts as they fall due during the next 4 – 6 weeks.

Front 9

Equity Ratio

This shows the proportion of Assets funded by the owner.

Back 9

For every $1 of assets (owner's name) has contributed (figure) cents and has borrowed (figure) cents, meaning he has funded (more/less) of the business assets than the outsiders.