Interpretation of Financial Statements
The financial statement that shows a business’s assets, liabilities, and equity.
A: What is the balance sheet (or statement of financial position)?
This profitability ratio is calculated as (Net profit ÷ Revenue) × 100.
A: What is net profit margin?pg 141
The percentage of employees leaving an organisation in a given time period.
A: What is labour turnover?
The amount of money that is left over after all expenses, including taxation, have been deducted from the revenue.
A: What is net profit pg 133
This ratio measures how easily a firm can pay short-term debts.
A: What is the current ratio (or liquidity ratio)?pg 143
the number of staff who are absent divided by the number of staff employed.
What is Rate of absenteeism? pg 153
the gross profit minus selling and administrative costs.
A: What is operating profit? Pg 133
The gearing ratio measures the proportion of finance coming from this source.
A: What is debt (or borrowed capital)?
The number of employees who remain in a business over a given time.
A: What is labor retention?157
Non-current assets are expected to be used for more than this length of time.
A: What is one year?
this is a severe test of liquidity.
A: What is acid test ration pg 143
Training, provide necessary resources, hand over authority, inspire confidence, provide feedback.
A: What are empowerment strategies?
long-term liabilities of a business.
A: What is non current liabilities. 136
this ratio shows the connection between profit and the size of the business.
What is Return on Capital Employed? pg 145
A drawback of relying on human resource measures is that they may be influenced by these external factors.
A: What are economic conditions (or external environment factors)?