Appendix: Ratio formula
Earnings per
share (EPS)
=
Profit for the year
Number of equity
shares
Net profit margin
=
Net profit
Sales revenue
Current ratio
=
Current assets
Current liabilities
Operating profit
margin
=
Operating profit
Sales revenue
Quick ratio (Acid
test)
=
Current assets –
inventories
Current liabilities
Debt-to-equity
=
Dividend yield
=
Dividend
Market value of shares
Price-to-earnings
ratio (P/E)
=
Market price per share
Earnings per share
Employed capital
turnover (Asset
turnover)
=
Sales revenue
Net capital employed
Return on capital
employed
(ROCE)
=
Operating profit
Net capital employed
Gearing ratio
=
Non-current debt
Non-current debt
+ total equity
Return on equity
=
Net profit
Average total equity
Dividend cover
=
Net profit
Annual dividend
Return on total
assets (ROA)
=
Net profit
Average total assets
Gross profit
margin
=
Trade payable
settlement period
=
Average trade
payables × 365
Cost of sales
Trade receivable
settlement period
=
Average trade
receivables × 365
Sales revenue
Total assets
turnover
=
Sales revenue
Average total assets
Non-current debt
Total equity
Gross profit
Sales revenue
Interest coverage
=
Inventory turnover
=
Cost of sales
Average inventory
=
Average inventory ×
365
Cost of sales
Inventory turnover
period
Operating profit
Net finance cost
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