886848
Description
Flashcards by Luca Sansone, updated more than 1 year ago
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Created by Luca Sansone
over 11 years ago
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| Question | Answer |
| Net current asset | current asset/ current liability |
| Liquid capital | current asset - inventory/ current liabilites |
| Gross Profit Margin | Gross profit/ revenue x 100 |
| Net profit margin | Net profit/ revenue x 100 |
| Payable days | Trade payables/ Cost of Sales x 365 |
| Recievable Days | Trade Recievables/ Revenue x100 |
| Mark Up Margin | Gross Profit/ Cost Of Sales x 100 |
| Inventory Turnover | Cost Of Sales/ Average Inventory |
| Average Inventory | Opening Inventory + Closing Inventory/ 2 |
| Return On Capital Employed | Net profit/ Capital Emplyed x 100 |
| Gearing | Net Current Liability/ Debenture + Equity (Net Assests) x 100 |
| What is the Prime Ratio for the Liquidity ratio's? | 1.5:1 |
| What Does Gearing measure? | Risk of long term debt <50% is low risk 50-75 % is warning <75% is high risk |
| The higher the ratio's are the better apart from... | Recievable Days and Gearing |
| The Three Limitations of the ratio's are... | - Doesn't count any externalities, only hard facts - Compares old data that may be irrelevant -Different needs for different businesses |
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