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Payable days
Payables = Trade Payables / Cost of Sales x 365
Receivable days
Receivables = Trade Receivables / Revenue x 365
ROCE
ROCE (%) = Operating Profit / Total Equity + Non-current liabilities x 100
- Bigger is better
- Useful for
- Benchmarking
- Overviews
Inventory turnover
Inventory Turnover = Cost of Sales / Inventories
Current ratio
Current ratio = current assets/ current liabilities
- Determine the risk of running out of cash
- Normally presented as a ratio, but can be shown as a decimal or a fraction
Gearing ratio
Non-current liabilities / total equity + non-current liabilities x 100
- Optimum is between 20-50%
- Below 20% is too low
- Above 50% is too high
- The above is usually correct, there can be exceptions however
For question, see current ratio.