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Payable days

Payables = Trade Payables / Cost of Sales x 365

Source paper

Receivable days

Receivables = Trade Receivables / Revenue x 365

Source paper


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

Source paper

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.