Accountancy/Quick Reference/Accounting Ratios

From Wikibooks, open books for an open world
Jump to navigation Jump to search

Profit-Based Ratios[edit| edit source]

x Gross Profit Operating Profit (PBIT) Net Profit Profit After Tax
Gross Profit Margin % Operating Profit Margin % Net Profit Margin %
ROCE %
Return on Equity %
Interest Cover
Earnings per Share

The table shows how to calculate the ratios by multiplying the row and column headings together. e.g.

Gross Profit Margin % =

Earnings per Share =

Also[edit| edit source]

Sales = Turnover
Equity = Ordinary Share Capital + Reserves
Debt = Long Term Liabilities = Non-Current Liabilities
Capital Employed = Equity + Debt
Asset Turnover = Sales / (Fixed Assets + Net Current Assets)
Fixed Assets + Net Current Assets = Equity + Debt (Accounting Equation)
ROCE = Operating Profit Margin x Asset Turnover