FIM6221 Formulas and Ratios

VAT Excl. (add VAT)

SP x 1.15

VAT Incl. (remove VAT)

Incl. price / 1.15

(Rand) Mark Up

SP (VAT Excl.) - CP (VAT Excl.)

(%) Mark Up

SP - CP / CP x 100

Mark Down

Old SP x (1 - Markdown %)

Discount on CP

Old Cost x (1 - Discount %)

Solvency

Total Assets / Total Liabilities (x : 1)

Profitability

Gross Profit / Total Sales x 100

Net Profit Percentage

Net Profit / Total Sales x 100

Return on Average Owners Equity

Net Profit / Average Owners Equity x 100

• Average Owners Equity = Opening Equity + Closing Equity / 2

Current Ratio

Current Assets / Current Liabilities (x :1)

Acid Test Ratio

CA - Inventory / CL (x : 1)

Debtor’s Days

Avg. trade debtors / Credit sales x 365

• Avg. TD = Opening TD + Closing TD / 2

  • Credit sales = Revenue x X% (X% = percentage of sales on credit)

Creditors Days

Average Trade Creditors / Credit Purchases x 365

• Avg. TC = Opening TC + Closing TC / 2

• Credit sales = COS x X% (X% = percentage of purchases on credit)

Inventory Turnover

COS / Average Inventory

• Avg. Inventory = Opening I + Closing I / 2

Debt 2 Equity

NCL / Total Equity

EPS - Earnings per Share

Net Profit after Tax / No. of Ordinary shares

P/E ratio

Market price per share / EPS

Dividend Yield

Dividend per share / Market price per share x 100D

DPR

DPS / EPS x 100

DPS

DPR x EPS

Price to Book

Market price per share / Book Value per share