LIQUIDITY RATIOS

Current Ratio
The sum of current assets and quoted investments
expressed as a ratio of total current liabilities.

Acid Test
The sum of current assets less stocks and work-in-
progress expressed as a ratio of total current liabilities.

Stock Turnover
Total sales divided by stocks: the number of times stocks
are turned over during the year.

Credit Period (Days)
Trade debtors divided by total sales and multiplied by 365 giving the average number of days taken before accounts
due are paid.

Working Capital /Sales
Working capital (namely current assets minus current liabilities) expressed as a percentage of sales.

Trade Creditors/Debtors
Trade creditors expressed as a ratio of trade debtors.

PROFITABILITY RATIOS

Return on Capital
Pre-tax profit expressed as a percentage of capital
employed.

Return on Assets
Pre-tax profit expressed as a percentage of total assets.

Pre-tax Margin
Pre-tax profit expressed as a percentage of sales.

Return on Shareholders Funds
Pre-tax profit expressed as a percentage of shareholders funds.

GEARING RATIOS

Borrowing Ratio
Total debt expressed as a percentage of net worth (Shareholders funds less intangibles).

Equity Gearing
Shareholders funds expressed as a percentage of total liabilities.

Debt Gearing
Long term debt expressed as a percentage of net worth.

Interest Cover
Pre-interest, pre tax profit expressed as a ratio of interest payable.

PRODUCTIVITY RATIOS

Sales/Tangible Assets
Total Sales expressed as a ratio of tangible assets.

Average Remuneration/Employee
Total employee remuneration divided by the number of employees.

Profit/Employee
Pre-tax profit divided by the number of employees.

Sales/Employee
Total sales divided by the number of employees.

Capital Employed/Employee
Capital employed divided by the number of employees.

Tangible Assets/Employee
Tangible fixed assets divided by the number of employees.

Total Assets/Employee
Total assets divided by the number of employees.

Employee Remuneration /Sales
Wages expressed as a percentage of total sales.