Ratios Formulas Class Test

For each ratio – give the formula, answer in %, cents, days,

months, ideal etc.
Gross Profit Margin Net Profit Margin

Gross Profit x 100 = % Net Profit x 100 = %

Sales 1 Sales 1

Return on Capital Employed Return on Shareholders Funds

Net Profit before(+) interest &Tax) x 100 Net Profit X 100_ = %

Capital employed 1 Issued Ord Sh Cap
=% + P&L Balance 1

Acid Test Ratio Current Ratio

(Current Assets- Closing Stock) Current Assets

Current Liabilities Current Liabilities
Ideal….1:1 Ideal… 2:1
Gearing Ratio Debtors Days

Debentures x 100 Debtors x 12 = X months

Capital Employed 1 Credit Sales

Creditors Days Percentage Mark-Up

Creditors x 12 = X months Gross Profit x 100 = %

Credit Purchases Cost of sales 1

Stock Turnover

Cost Of Sales = X times

Average Stock