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Accounting Ratios Cheat Sheet by

A collection of ratios and formulas from Gowthorpe - Business Accounting and Finance
accounting     business     formulas     accounts     ratios

Perfor­mance Ratios

Gross Profit Margin
Net Profit Margin
Return on Capital Employed (ROCE)

Efficiency Ratios

Fixed Asset Turnover
Revenue / Fixed Assets
Inventory Turnover
Cost of Sales / Average Inventory
Inventory Turnover in Days
Average Inventory / Cost of Sales * 365
Trade Receiv­ables Turnover
Average Trade Receiv­ables / Revenue on Credit * 365
Trade Payables Turnover
Trade Payables / Purchases * 365

LENDING RATIOS

Gearing
Debt / Equity
Interest Cover
Profit before Interest and Tax / Interest
 

Liquidity Ratios

Current Ratio
Current Assets / Current Liabil­ities
Quick Ratio
Current Assets - Invent­ories / Current Liabil­ities

Investor Ratios

Dividend Per Share
Dividend for the Year / No. of Shares issued
Dividend Cover
Profit after Tax / Dividend
Earnings Per Share
Profit after Tax / No. of Shares
Price Earning or P/E
Price of Share / Earnings Per Share
Profit after Tax refers to amount available to give to oridinary shareh­olders. Premium not included.
 

Terms of Accounting

Recogn­ition
Revenue is not the same as received and Expend­iture is not the same as cash paid.
Accruals (Matching)
Estimating the value to be paid and adding that as an expense in the Financial Statements and making any adjust­ments later on.
Bad & Doubtful Debts
Bad & Doubtful Debts are added to Expenses in SFP. However, Doubtful debts are deducted from Receiv­ables in Income Statement
Net Realisable Value
The value inventory holds (not cost price or selling price)

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