Finance formulas (Year 13)

What is the formula to find the current ratio of a business?

• Current assets ÷ current liabilities

• Current assets - inventory ÷ current liabilities

• Gross profit ÷ revenue x 100

• Operating profit ÷ revenue x 100

What is the formula to find the acid test ratio of a business?

• Current assets ÷ current liabilities

• Current assets - inventory ÷ current liabilities

• Gross profit ÷ revenue x 100

• Operating profit ÷ revenue x 100

What is the formula to find the gross profit margin of a business?

• Current assets ÷ current liabilities

• Current assets - inventory ÷ current liabilities

• Gross profit ÷ revenue x 100

• Operating profit ÷ revenue x 100

What is the formula to find the operating profit margin of a business?

• Current assets ÷ current liabilities

• Current assets - inventory ÷ current liabilities

• Gross profit ÷ revenue x 100

• Operating profit ÷ revenue x 100

What is the formula to find the gearing ratio of a business?

• Non-current liabilities ÷ shareholders' equity + non-current liabilities

• Trade receivables ÷ sales revenue x 365

• Trade payables ÷ cost of sales x 365

• Cost of sales ÷ average value of inventories

What is the formula to find the rate of inventory turnover of a business?

• Non-current liabilities ÷ shareholders' equity + non-current liabilities

• Trade receivables ÷ sales revenue x 365

• Trade payables ÷ cost of sales x 365

• Cost of sales ÷ average value of inventories

What is the formula to find the trade receivables turnover (in days) of a business?

• Non-current liabilities ÷ shareholders' equity + non-current liabilities

• Trade receivables ÷ sales revenue x 365

• Trade payables ÷ cost of sales x 365

• Cost of sales ÷ average value of inventories

What is the formula to find the trade payables turnover (in days) of a business?

• Non-current liabilities ÷ shareholders' equity + non-current liabilities

• Trade receivables ÷ sales revenue x 365

• Trade payables ÷ cost of sales x 365

• Cost of sales ÷ average value of inventories

What is the formula for straight line depreciation?

• Purchase cost - salvage value ÷ expected useful life

• Trade receivables ÷ sales revenue x 365

• Trade payables ÷ cost of sales x 365

• Cost of sales ÷ average value of inventories

What is the formula for calculated net realisable value?

• Purchase cost - salvage value ÷ expected useful life

• Amount existing inventory can be sold for - cost of selling it

• Trade payables ÷ cost of sales x 365

• Cost of sales ÷ average value of inventories