# Ratios

### Description

Key financial ratios
Flashcards by Sharon Yates, updated more than 1 year ago
 Created by Sharon Yates over 8 years ago
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29

## Resource summary

 Question Answer Current Ratio Current Assets / Current Liabilities Acid Test Current Assets-Inventory / Current Liabilities = _ : 1 Interest Cover Profit from Operations / Finance Costs = times Gearing Non-current liabilities / Total equity + Non-currentl liabilities = x times ROCE Profit from Operations / Total Equity + Non-current Liabilities Return on Assets Profit from Operations / Total Assets Return on Equity Profit after Tax / Total Equity Gross Profit % Gross Profit / Revenue (Sales) Operating Profit % Profit from Operations / Revenue Inventory Turnover Cost of Sales / Inventories = _ times Inventory Holding Period Inventories / Cost of Sales x 365 days Trade receivables collection period Trade Receivables / Revenue x 365 days Trade Payables Payment Period Trade Payables / Cost of Sales x 365 days Working Capital Cycle Inventory days + Receivable Days less Payables Days Asset turnover (total assets) Revenue / Total Assets = _ times Asset Turnover (net assets) Revenue / Total assets - Current liabilities Name 2 liquidity ratios Current ratio Acid test ratio Name 2 financial position ratios Interest cover Gearing Name 4 Profitability ratios ROCE ROE Gross Profit % Operating Profit % Return on total assets Expense/revenue % Name 3 use of resources ratios Inventory turnover Inventory holding period Trade receivables collection period Trade payables payment period Working capital Cycle Asset turnover

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