Accounting ratios
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12 Terms
1
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Gross profit markup
Gross profit/Cost of sales × 100
2
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Gross profit margin
Gross profit/ net revenue × 100
3
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Profit margin
NET PROFIT/REVENUE × 100
4
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Average inventory
(Closing inventory - Opening inventory) ÷2
5
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Rate of inventory turn
Cost of sales ÷ average inventory
6
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Capital employed
Capital + Long term loan
7
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Return on capital employed
NET profit before interest ÷ capital employed
8
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Working capital ratio
Current assets÷ current liabilities
9
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Quick ratio
Acid test ratio
10
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Quick ratio
Current assets excluding inventory ÷ Current liability
11
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Trade receivables turnover
Trade receivables /Credit sales × 365
12
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Note 
Flashcards (30)