Year 11 ATAR BME Financial Ratios & Formula Sheet

Vocabulary flashcards covering the official Year 11 ATAR BME financial ratios and basic financial formulas.

Current Ratio

A liquidity ratio calculated as $\text{Current Assets} \div \text{Current Liabilities}$

Quick Ratio

A liquidity ratio calculated as $(\text{Current Assets} - \text{Inventory}) \div \text{Current Liabilities}$

Working Capital

A liquidity measure calculated as $\text{Current Assets} - \text{Current Liabilities}$

Operating Cash Flow Ratio

A liquidity ratio calculated as $\text{Operating Cash Flow} \div \text{Current Liabilities}$

Debt-to-Equity Ratio

A stability ratio calculated as $\text{Total Liabilities} \div \text{Owner's Equity}$

Asset-to-Liability Ratio

A stability ratio calculated as $\text{Total Assets} \div \text{Total Liabilities}$

Earnings Retention Ratio

A stability ratio calculated as $\text{Retained Earnings} \div \text{Net Profit} \times 100$

Inventory Turnover

A stability ratio calculated as $\text{Cost of Goods Sold} \div \text{Average Inventory}$

Net Profit Margin

A profitability ratio calculated as $\text{Net Profit} \div \text{Sales Revenue} \times 100$

Gross Profit Margin

A profitability ratio calculated as $\text{Gross Profit} \div \text{Sales Revenue} \times 100$

Return on Investment (ROI)

A profitability ratio calculated as $\text{Net Profit} \div \text{Investment} \times 100$

EBIT

Earnings Before Interest and Tax, calculated as $\text{Net Profit} + \text{Interest} + \text{Tax}$

Cost of Goods Sold (COGS)

Calculated as $\text{Opening Inventory} + \text{Purchases} - \text{Closing Inventory}$

Gross Profit

Calculated as $\text{Sales Revenue} - \text{COGS}$

Net Profit

Calculated as $\text{Gross Profit} - \text{Expenses}$

Sales Revenue

Calculated as $\text{Gross Profit} + \text{COGS}$

Average Inventory

Calculated as $(\text{Opening Inventory} + \text{Closing Inventory}) \div 2$

Operating Cash Flow

Calculated as $\text{Cash inflows from operating activities} - \text{Cash outflows from operating activities}$