Ratios

Gross profit margin formula

• NP/sales x 100/1

• GP/sales x 100/1

• NP/ Cap Emplo x 100/1

• GP/Cap employed x 100/1

Net profit margin formula

• GP/Sales x100/1

• NP/cap employ x 100/1

• NP/sales x 100/1

• NP/GP x 100/1

Net profit margin is given in

• Percentage

• Times

• Cent

• Days

Return on Investment

• NP/Loans x 100/1

• GP/Cap employ x 100/1

• NP/cap employ x 100/1

• Cap employ/NP x 100/1

Liquidity ratio

• NP/Cap employ x 100/1

• Current assets:current liabilities

• Debt cap:equity cap

• GP/sales x 100/1

Acid test ratio

• Current assets:long term liabilities

• Fixed assets:current liabilities

• Current assets:current liabilities

• Current assets - closing stock:current liabilities

Gearing refers to

• Whether the business is financed more by debt or equity

• The ability to pay their short term debts

• The ability to pay their long term debts

• How much money the business is making

Current ratio ideal is

• 1:1

• 2:1

• 3:1

• 5:1

Current ratio formula is

• Current liabilities:current assets

• Current assets - closing stock:current liabilities

• Current assets:current liabilities

• Fixed assets:current liabilities

Gearing ratio is

• Capital employed:equity capital

• Debt capital:equity capital

• Equity capital:debt capital

• Current assets:debt capital