business 3.5 profitability and liquidity ratio analysis
Studied by 0 people
Learn
Practice Test
Spaced Repetition
Match
Flashcards1/12
There's no tags or description
Looks like no tags are added yet.
Name | Mastery | Learn | Test | Matching | Spaced |
|---|
No study sessions yet.
13 Terms
liquidity ratio
financial rations that examine an organizations ability to pay short term liabilities
liquidity
ease with which a business can convert assets into cash without affecting market value
liquidity crisis
inability to pay off short-term debts
current ratio
calculates ability of firm to pay off short term debts within 12 months
balance sheet (equity)
cash + stock + debtors
current liability (equity)
bank overdrafts + trade creditors + short term loanscu
current ratio (equity)
current assets / current liabilities
acid test ratio
measuring ability for an organization to pay off debt without selling stock
acid test ratio (equity)
(current assets - stock) / current liabilities
gross profit (equity)
(revenue - total costs) / revenue
profit margin (equity)
(profit before interest + tax / sales revenue) x 100
capital employed (equity)
non current liabilites + equity
return on capital employed (equity)
(profit before interest + tax / capital employed) x 100