Ratio analysis equations

Gross profit % =

gross profit / sales

operating profit % =

operating profit / sales

profit before tax % =

profit before tax / sales

profit after tax % =

profit after tax / sales

return on capital employed =

operating profit / (equity + long term borrowings)

return on equity =

profit after interest and tax / equity

asset turnover =

sales / capital employed

net asset turnover =

sales / net asset

non-current asset turnover =

sales / non-current assets

Earnings per share =

(profit after tax - preference dividends) / number of ordinary shares

price earnings ratio =

current market price per share / EPS

dividends per share =

ordinary dividend / number of ordinary shares

dividend cover =

(profit after tax - preference dividends) / ordinary dividend

dividend yield =

DPS / current market price per share

current ratio =

current assets / current liabilities

acid test =

(current assets - inventory - prepayment) / current liabilities

inventory holding period =

inventory / COS x 365

receivable collection period =

trade receivables / sales x 365

payable payment period =

trade payables / COS x 365g

gearing ratio =

long and short term borrowing / equity

debt ratio =

total liabilities / total assets

debt to equity ratio =

long term borrowing / equity

interest cover =

profit before tax and interest expense / interest expense