Business efficiency ratios

Current ratio

current assests/ current liabiities

acid test ratio

liquid assets/ current liabilities

Gross profit margin

gross profit/ sales revenue x100

operating profit margin

operating profit/ sales revenuex100

Return on capital employed

operating profit/ capital employed x 100

trade payables ratio

Trade payables/ credit purchases x 365

trade recievevables

trade recieveables/ credit sales x 365

rate of inventory turnover

cost of sales/average inventories

gearing

non current liabilities /capital employed x100

P/E ratio

market share price/ earnings per share

dividend yield ratio

dividents/ shareholder value x100

working capital

current assets-current liabilities

divident cover ratio

profit for the year/annual dividens