Top Notch Profitability Ratios Formula Pdf
EB Cost of equity capital PG HA Return on assets ROA Net Income Interest expense 1-tax rate Average total assets.
Profitability ratios formula pdf. GM GP NS 100. Return on Total Assets. Operating Profit Ratio Operating Profit X100 Net Sales.
Gross profit is equal to net sales minus cost of goods sold. Profitability Ratios Numerator Denominator Interpretation and Benchmark Return on equity ROE Net income Average total shareholders equity Profitability of all equity investors investment Benchmark. For a percentage multiply the ratio by 100 LIQUIDITY RATIOS.
Profitability Gross income Gross profit margin Sales Operating income Operating profit margin Sales Financial ratio formula sheet prepared by Pamela Peterson-Drake 1. Liquid capital ratio Current assets Inventories Current liabilities also known as the acid test or quick ratio Gearing ratio Debt loan capital preference shares if any Equity ordinary shares reserves also known as capital gearing ratio or debtequity ratio. Current ratio Current liabilities Current assets - Inventory Quick ratio Sales Current assets - Current liabilities Net working capital to sales ratio 3.
This study uses a quantitative approach. Ratio Analysis 4 P a g e Profitability Sustainability Ratios continued Return on Assets Net Profit Average Total Assets Measures your ability to turn assets into profit. Sales to Fixed Asset ratio Sales Fixed Assets CALCULATION Step 1.
Profitability ratios formula is one of the key tool for financial analysis. Operating profit ratio can be calculated by formula as follows. This is a quick financial ratio cheatsheet with short explanations formulas and analyzes of some of the most common.
Show the table as given below calculation Year 20X1 Year 20X2 Year 20X3 155359574000 284488232000 153907344000 226426625000 202548387000 190 333538000 Company A 069 times 140 times 081 times 152219526000. Group Ratio Formula Profitability ratios Percentage of gross profit to sales Percentage of net profit to sales Net profit as percentage of Capital Employed also called Return on Owners Equity Investment ratios NSSCH Earnings per share PriceEarnings ratio Gross profit Turnover 100 1 Net profit Turnover Net Income Owners equity 2 Net income after tax. KEY ACCOUNTING RATIOS Profitability ratios Gross profit percentage Gross profit x 100 Sales revenue Net profit percentage Net profit x 100 Sales revenue Return on capital employed Operating profit x 100 Capital employed Liquidity ratios Current ratio Current assets 1 Current liabilities.