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Interp formulas
Interpretation of accounts formulas
| Ratio | Formula |
|---|---|
| Return of capital employed | (net profit before interest/capital employed) x100 |
| Gross profit percentage/margin | (gross profit/sales) x100 |
| Net profit percentage/margin | net profit before interest/sales x100 |
| total expenses to sales | total expenses/sales x100 |
| Sales to total assets | Sales/total assets |
| sales to fixed assets | sales/fixed assets |
| sales to current assets | sales/current assets |
| stock turnover | cost of sales/average stock |
| period of credit given to debtors | trade debtors x12,52,365/credit sales |
| Period of credit recieved from creditors | tarde creditors x12,52,365/credit purchases |
| current ratio | current assets:current liabilities |
| Acid test/quick ratio | current assets-closing stock:current liabilities |
| solvency ratio | total assets:total debts |
| Fixed interest capital to total capital | loans+debentures+preference shares/capital employed x100 |
| fixed interest capital to equity capital | loans+debentures+preference shares/shareholders funds x100 |
| interest cover | net profit before interest/interest |
| earnings per share | net profit after preference dividend/no. Ordinary shares issued |
| price earnings ratio | market price 1 share/EPS |
| dividend per share | Total ordinary dividend/no. Ordinary shares issued |
| Dividend yield | DPS/market price x100 |
| dividend cover | net profit after preference dividend/ordinary dividend OR EPS/DPS |
| period to recoup price | market price/DPS |
| projected market value | Price earnings ratio xEPS |