Business Finance FORMULAE

Identify the correct formula for TRADE RECEIVABLE DAYS

• Trade receivables / credit sales  x 365
• Trade receivables / cost of sales  x 365
• Trade receivables / credit sales  x 100
• Trade receivables / cost of sales  x 100

Identify the correct formula for TRADE PAYABLES DAYS

• Trade payables / credit purchases  x 100
• Trade payables / credit sales  x 365
• Trade payables / credit purchases  x 365
• Credit purchases / trade payables  x 365

Identify the correct formula for INVENTORY TURNOVER

• Average inventory / cost of sales
• Opening inventory / closing inventory
• Average inventory / cost of sales x 365
• Opening inventory + closing inventory / 2

Identify the correct formula for CURRENT RATIO

• Current liabilities / current assets
• Current assets / current liabilities
• Current assets - inventory / current liabilities
• Current assets / non current liabilities

Identify the correct formula for LIQUID CAPITAL (QUICK) RATIO

• Current assets / current liabilities
• Non current assets - inventory / current liabilities
• Current assets - inventory / non current liabilities
• Current assets - inventory / current liabilities

Identify the correct formula for RETURN ON CAPITAL EMPLOYED (ROCE)

• Gross profit / capital employed x 100
• Net profit before interest and tax / capital employed x 100
• Net profit before interest and tax / capital employed
• Net profit before interest and tax / non current liabilities x 100

Identify the correct formula for NET PROFIT MARGIN

• Net profit / sale x 100
• Net profit / cost of sale x 100
• Gross profit / cost of sale x 100
• Gross profit / sale x 100

Identify the correct formula for GROSS PROFIT MARGIN

• Net profit / sale x 100
• Net profit / cost of sale x 100
• Gross profit / cost of sale x 100
• Gross profit / sale x 100

Identify the correct formula for GROSS PROFIT MARK-UP

• Gross profit / sale x 100
• Net profit / cost of sale x 100
• Gross profit / cost of sale x 100
• Gross profit / cost of sale

Identify the correct formula for BREAKEVEN POINT in units.

• Fixed costs / contribution per unit
• Fixed costs / sales
• Fixed costs x contribution per unit
• Fixed costs - contribution per unit