Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
8 Cards in this Set
- Front
- Back
|
Return on ordinary shareholders funds (ROSH) |
Profitability ratio
Net profit(less any preference dividends) / ordinary share capital and reserves
This ratio measures the profit earned for each pound invested in the firms shares Net profit /equity *100 |
|
|
Return on capital employed ratio (ROCE) |
Profitability ratio Operating profit /(share capital+reserves+non current liabilities) *100 Measures relationship between profit generated during a period and the average long term |
|
|
Gross profit margin ratio |
Profitability ratio Gross profit/sales revenue *100 Measures relationship between the gross profit generated during a period to the sales revenue eberatrd during the same period |
|
|
Operating profit margin ratio |
Profitability ratio Operating profit/sales revenue *100 Measures relationship between operating profit generated during a period to the sales revenue generated during the sales revenue Operating profit before tax and interest used as it represents the profits from trading operations before any interest or tax expenses taken into account |
|
|
Average settlement period for trade receivables |
Average trade receivables / credit sales revenue *365 Calculates how long, on average, credit customers take to pay the amounts that they owe to the business |
|
|
Average settlement period for trade payables ratio |
Average trade payables/ credit purchases *365 Where credit purchases=closing inventories - opening inventories +cost of sales Measure how long, on average, the business takes to pay those who have supplied goods and services on credit |
|
|
Current ratio |
Current assets/ current liabilities Compares the liquid assets (cash and those other assets held that will soon be turned into cash) of the business with the current liabilities |
|
|
Acid test ratio |
Current assets (excluding inventories/ current liabilities Very similar to current ratio. Represents a more rigorous test of liquidity. It is a variation of the current ratio and excludes inventories |
