Ratio Formulas
net profit / weighted average number of shares
What is earnings per share or EPS?
quick ratio (is also known as the _________)
What is the acid test also known as?
Assessing the financial position of a business the main focus is its stability and exposure to risk.
Position ratio
What are things your business ownes?
Assets
This ratio highlights relationship between total sales and cost of sales
Gross profit margin
current share price / EPS
What is price-earnings ratio or PE?
The Gross profit margin and the Net profit margin
profitabilty ratios
Things which are your business owes
Liabilities
This ratio indicates relationship between closing inventory and cost of sales
Inventory holding period
(Non-current liabilities / Equity)* 100 (%)
Do you know formula of Debt/Equity?
This is what the owner has investedin the business (is also known as _________)
Owner's equity
The measure used to evaluate a company's ability to pay its short term obligations
Current ratio
This equation is the basis for the Balance sheet.
Assets= Equity+ Liabilities
This ratio shows relationship between non-current liabilities, total assets and current liabilities
Gearing ratio
(Net Profit / Sales revenue)* 100 (%)
Net Profit Margin
These ratios measure the ability of a company to make a profit.
What are profitability ratios?
What is GAAP?
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
This ratio represents relationship between profit from operations and finance cost
Interest cover
Formula of receivable days
(Receivable/Revenue)∗365(days)
Revenue or income (is also know as ________)
sales growth
It is deducted from sales to find gross profit margin
Cost of sales
This is where we first record every transaction.
Business journal
In order to find this ratio you have to be informed with net profit, current share price and weighted average number of shares
Price-earnings ratio