Accountancy Calculations

Assets

Liabilities + Equity

Equity

Capital + income - expenses - Drawings

Reducing Balance Depreciation

Rate % x NBV of the asset at the start of the year

Straight line depreciation

Annual depn = (Historical cost - Residual Value) / Useful life

Return on equity (ROE)

(Net profit / Equity) x 100

Return on Capital Employed (ROCE)

Operating profit / (Equity + Non-Current liabilities) x 100

Gross Profit Margin

(Gross Profit/ Sales Revenue) x 100

Operating Profit Margin

(Operating profit / Sales Revenue) x 100

Net Profit Margin

(Net profit / Sales Revenue) x 100

Inventory turnover period

(Inventory / Cost of Sales) x 365

Settlement period for receivables

(Trade Receivables / Credit sales revenue) x 365

Settlement period for Payables

(Trade Payables / Credit Purchases) x 365

Sales Revenue to Capital Employed

Sales Revenue / (Equity + Non-Current liabilities)

Sales Revenue per Employee

Sales Revenue / Number of Employees

Current Ratio

Current Assets / Current Liabilities

Quick Ratio

(Current Assets - Inventories) / Current Liabilities

Gearing Ratio

Non-Current Liabilities/ (Equity + Non-Current Liabilities) x 100

Interest Cover Ratio

Profit before Interest and Tax / Interest

Dividends Payout Ratio

(Dividends announced for the year / Earnings for the year available for Dividends) x 100

Dividends Cover Ratio

Net Ratio / Dividends announced for the year

Dividend Yield Ratio

(Dividend per Share / Market Value per Share) x 100

Earnings Per Share

Net Profit / Number of Ordinary Shares

Price Earning Ratio

Market Value per Share / Earnings per Share

Break Even Point (BEP)

Fixed Cost / selling price - variable cost per unit

Margin of Safety

Expected sales - Break even Point