Busy. Please wait.

show password
Forgot Password?

Don't have an account?  Sign up 

Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
We do not share your email address with others. It is only used to allow you to reset your password. For details read our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
Don't know
remaining cards
To flip the current card, click it or press the Spacebar key.  To move the current card to one of the three colored boxes, click on the box.  You may also press the UP ARROW key to move the card to the "Know" box, the DOWN ARROW key to move the card to the "Don't know" box, or the RIGHT ARROW key to move the card to the Remaining box.  You may also click on the card displayed in any of the three boxes to bring that card back to the center.

Pass complete!

"Know" box contains:
Time elapsed:
restart all cards
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how


Ratios for Leaving Certificate Accounting

Current Ratio/Working Capital Ratio Current Assets/Current Liabilities X:1 (Ideal 2:1)
Acid Test/Quick Ratio Current Assets-Closing Stock/Current Liabilities = X:1 Ideal 1:1
Return on Capital Employed/Return on Investment/ROI Profit before Interest Subtracted/Capital Employed X 100/1 = X% Should be more than 4%
Return on Shareholders'Funds/Return on Equity Profit after Preference Dividends have been subtracted/Shareholders' Funds X 100/1 = X% Should be more than 4%.
Shareholders' Funds Capital Employed - Loans - Preference Shares
Shareholders' Funds Issued Capital + Profit + Reserves
Earnings per Share (EPS) The Profit after Preference dividends have been paid/The number of Ordinary Shares Issued = X Cent per Share
Gearing Debentures + Preference Shares/Capital Employed X 100/1 = X%. Answer should be < 50% (Lowly geared.)
Dividend per Share (DPS) Ordinary Dividends/Number of Ordinary Shares = X Cent per Share
Dividend Cover Profit after Preference Shares have been subtracted/Ordinary Dividends = X Times. The higher the better.
Dividend Yield Dividend per Share (DPS)/Market Price per Share (MPS)X 100/1 = X%. Ideally should be more than the stock exchange average of 3%.
Price Earnings Ratio/Number of years taken to recoup price of one share at current rate of earnings. Market Price per Share (MPS)/Earnings per Share (EPS)= X:1 if asked for P/E ratio or X years if number of years asked for. Ideally should be < 16 or 17 years.
The Length of Time taken to recoup Share’s Value at Present Pay-out Rate Market Price per Share (MPS)/Dividend per Share (DPS)= X Years. ideally should be < 25 years.
Market Capitalisation Number of Ordinary Shares issued X Market Value of one Share = €X.Should be greater than the book value of equity funds.
Gross Profit Percentage/Margin Gross Profit/Sales x 100/1. The higher the better.
Net Profit Percentage/Margin Net Profit/Sales x 100/1. The higher the better.
Total Expenses as a Percentage of Sales. Total Expenses/Sales x 100/1. The lower the better.
Creditor Collection Period Trade Creditors/Credit Purchases x 365/1 = X days. Trade Creditors /Credit Purchases x 12/1ore = X days. Should be < 2 months and m than the period of credit given to Debtors.
Debtor Collection Period. Debtors/Credit Sales x 365/1 = x Days. Debtors/Credit Sales x 12/1 = X Months.Ideally less than 2 months. This figure should be less than the average creditor collection period.
Stock Turnover Cost of Sales/Average Stock = X Times.
Average Stock Opening Stock + Closing Stock/2 = €
Asset Turnover Sales/Total Net Assets
Interest Cover Net Profit before Interest is subtracted/Interest = X Times. The higher the better.
Created by: egibbonsnotes