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Accounting Ratios
Leaving Certificate Q5 Intrepreation of accounts
Ratio | Formula |
---|---|
Return on Capital Employed | Profit before interest&Tax/ Capital Employed X 100/1 = % |
Gross Profit Margin (Percentage) | Gross Profit / Sales X 100/1 = % |
Net Profit Margin (Percentage) | Net Profit / Sales X 100/1 = % |
Percentage (Gross Profit) Mark-UP | Gross Profit / Cost of Sales X 100/1 = % |
Current Ratio | Current Assets : Current Liabilities = X:1 |
Acid Test | Current Assets - Closing Stock : Current Liabilities = X:1 |
Stock Turnover | Cost of Sales/Average Stock = times |
Average Stock | opening stock + closing stock/ 2 = € |
Average period of credit given to Debtors | Trade Debtors/Credit Sales X 365 = days |
Average period of credit received from Creditors | Trade Creditors/Credit Purchases X 365 = days |
Fixed Interest capital to Equity Capital | Loans + Debentures+preference shares (debt) / Ordinary shares capital+ Reserves (Equity) X 100/1 = % |