Ratios Ordinary Level Purchases Cost of – € Sales = Gross Profit Cost of Sales = Opening Stock + Purchases – Closing Stock Return on Capital Profit before % Employed interest x100 Capital Employed Current Current Assets Ratio Current Liabilities Liquid Ratio ( Acid Current Assets Ratio – Test) Closing Stock Current Liabilities Period of Credit Debtors x12 Months (days) given to debtors Credit Sales Gross Profit % Gross Profit x100 % Sales Net Profit % Net Profit x100 % Sales Period of credit Creditors x12 Months (days) received from Credit purchases creditors Average Stock Opening Stock + € Closing Stock 2 Stock Turnover Cost of Sales Times Average
Ratios Ordinary Level Purchases – Cost of Sales = Gross Profit Cost of Sales = Opening Stock + Purchases – Closing Stock € Return on Capital Employed Profit before interest x100 Capital Employed % Current Current Assets Current Liabilities Ratio Liquid Ratio ( Acid Test) Current Assets – Closing Stock Current Liabilities Ratio Period of Credit given to debtors Debtors x12 Credit Sales Months (days) Gross Profit % Gross Profit x100 Sales % Net Profit % Net Profit x100 Sales % Period of credit received from creditors Creditors x12 Credit purchases Months (days) Average Stock Opening Stock + Closing Stock 2 € Stock Turnover Cost of Sales Average Times
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