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Act 5th ratios formu
| Question | Answer |
|---|---|
| 1. Profitability ratios | ROCE, ROSF/ROEF, Gross profit%, Net profit% |
| 2. Liquidity ratios (Can you pay people back) | Current Ratio, Acid test/Quick ratio |
| 3. Gearing ratios | Gearing, interest cover |
| 4. Activity ratios | Stock turnover, Average stock, Average period given to debtors, Average period received from creditors |
| 5. Investment ratios | Earnings per share (EPS), Price earnings (PE), Dividends per share (DPS), Dividend cover, Dividend Yield, Period to recoup price at current payout rate, Projected market value of a share |
| Before | Add/+ |
| After | Less/- |
| ROCE | Net profit (before interest + tax):Capital employed (CE) x100 = _% |
| ROSF/ROEF | NP (after tax + preference dividends):shareholders funds x100 =_% |
| Gross profit | Gross profit:sales x100 =_% |
| Net profit | NP:sales x100 =_% |
| Current ratio | Current assets:Current liabilities, Ideal 2:1 |
| Acid test/Quick ratio | CA(less closing stock):Current liabilities, Ideal 1:1 |
| Gearing | Loans + preference shares + Debentures:Capital employed x100 =_% |
| Interest cover | NP(before interest):interest =_times |
| Stock turnover | Cost of sales:average stock =_times |
| Average stock | Opening stock + Closing stock:2 = € |
| Average period given to debtors | Debtors:Credit sales x365 =_days |
| Average period received for creditors | Creditors:Credit purchases x365 =_days |
| Earnings per share | NP (after pref div): Number of ordinary shares x100 =_cent |
| Price earnings | Market value:Earning per share =_ years |
| Dividends per share | Ordinary dividends:Number of ordinary shares x100 =_cent |
| Dividend cover | NP (after pref div):Ordinary dividends =_times |
| Dividend yield | DPS:Market value x100 =_% |
| Period to recoup price at current payout rate | Market Value:DPS =_years |
| Projected market value of a share | P/E x EPS |