Financial indicators - Sole trader

How will the current ratio be calculated?

• Current assets : Current liabilities

• Current assets - trading stock : Current liabilities

• Total assets : Total liabilities

• Debt : Equity

How will the acid-test ratio be calculated?

• Current assets : Current liabilities

• Current assets - trading stock : Current liabilities

• Total assets : Total liabilities

• Debt : Equity

How will the solvency ratio be calculated?

• Current assets : Current liabilities

• Current assets - trading stock : Current liabilities

• Total assets : Total liabilities

• Debt : Equity

How can the markup % achieved be calculated?

• Operating profit x 100

  Cost of sales

• Gross profit x 100

  Cost of sales

• Sales . x 100

  Cost of sales

• Net profit x 100

  Sales

How can the % net profit on sales be calculated?

• Operating profit x 100

  Cost of sales

• Gross profit x 100

  Cost of sales

• Sales . x 100

  Cost of sales

• Net profit x 100

  Sales

How can the % return for a sole trader be calculated?

• Net profit x 100

  Capital

• Net profit x 100

  Average owners equity

• Net profit . x 100

  Average assets

• Net profit . x 100

  (Capital - drawings)/2

Choose the most favourable current ratio for a partnership. This means current assets are used optimally!

• 10 : 1

• 1,8 : 1

• 0,9 : 1

• 6,5 : 1

How would you describe the debt : equity ratio of 1,1 : 1?

• Low risk

• Medium risk

• High risk

• None of the above