Tooic 7 & 8 - Ratios

Return on Equity

(Profit available to owners/average equity) x 100

Return on Asset

(Profit or loss/ average total assets) x 100

Gross profit margin

(Gross profit/ sales revenue) x 100

Profit margin

(Profit or loss/ sales revenue) x 100

Cash flow to sales

(Cash flow from operating activities/ sales revenue) x 100

Asset turnover

(Sales revenue/ average total assets) x times

Days inventory

(Average inventory/ cost of sales) x 365 days

Days debtors

(Average trade debtors/ sales revenue) x 365 days

Inventory turnover

Cost of sales/ average inventory

Debtor’s turnover

Sales revenue/ average trade debtors

Current ratio

Current assets/ current liabilities

Quick ratio

(Current assets – inventory)/ current liabilities

Cash flow ratio

Net cash flow from operating activities/ current liabilities

Debt to equity ratio

(Total liabilities/ total equity) x 100

Debt ratio

(Total liabilities/ total assets) x 100

Equity ratio

(Total equity/ total assets) x 100

Interest coverage

(EBIT/ net finance costs) x 100

NTAB per share

(Shareholders’ equity – intangibles)/ # shares on issue at year end

Earnings per share

Profit available to shareholders/ weighted number of ordinary shares on issue

Dividend per share

Dividend paid or provided/ weighted number of ordinary shares on issue

Price earnings

Current market price/ earnings per share