BTEC Unit 3 finance ratios

Profitability ratios include :

• current

• return on capital employed

• stock (inventory) turnover

Long term loans are :

• current liabilities

• non-current liabilities

• non-current assets

• current assets

Capital employed =

• total equity + non-current liabilities

• total equity - non-current liabilities

• total equity x non-current liabilities

• total equity /

  non-current liabilities

Which ratio assesses liquidity ?

• operating profit margin

• current ratio

• gearing

• stock turnover

Current ratio =

• current assets x current liabilities

• current assets + current liabilities

• current assets / current liabilities

• current assets - current liabilities

Which is a type of efficiency ratio ?

• gross profit margin

• current ratio

• inventory (stock) turnover

What does the Receivable Days ratio assess ?

• How long it takes the business to pay suppliers

• How long it takes the business to pay customers

• How long it takes the customers to pay the business

• How quickly stock is delivered to the business

Payables Days ratio assesses :

• How quickly the firm pays its suppliers

• How quickly the suppliers pay the firm

• How quickly customers pay the firm

• How quickly the firm pays loans

Profit ratios = type of profit / ? (denominator)

• cost of goods sold

• revenue

• expenses

• finance costs

An investor will be most concerned with :

• Receivables days

• Payables days

• Operating profit margin

• Stock turnover