ROCE or return on capital employed measures the percentage rate of return a business gets on its capital employed. It is calculated by dividing the earnings before interest and tax by the total assets less current liabilities of the business.
ROCE – Return on Capital Employed November 6th, 2016Team
The Inventory Days ratio shows the average number of days sales a business is holding in its inventory. It is calculated by dividing inventory by average daily cost of goods sold. It is sometimes called the Stock Days ratio.
The net profit ratio is the profit after tax of the business expressed as a percentage of the revenue. It is calculated by dividing profit after tax by revenue.
The Net profit ratio is also called Net Margin or Net Profit Margin.
The return on sales is the operating profit of the business expressed as a percentage of the revenue. It is a measure of the level of true income a business generates on its sales. It is calculated by dividing operating profit by revenue. Operating profit is the same as profit before interest and tax (PBIT), otherwise called earnings before interest and tax (EBIT).
The interest coverage ratio measures the amount of earnings a business has to make interest payments. It is calculated by dividing the profit before interest and tax by the interest expense. It is sometimes called the interest cover ratio or simply interest coverage or interest cover.
The Working Capital Turnover ratio shows the revenue generated by your working capital. It is a measure of the efficiency with which the business uses its resources. It is calculated by dividing revenue by the working capital.
Working Capital Turnover Ratio November 6th, 2016Team
The quick ratio measures the liquidity of a business and its ability to meet its short term liabilities and debts. It is calculated by dividing current assets less inventory by current liabilities. It is also known as the Acid Test Ratio.
Quick Ratio or Acid Test Ratio November 15th, 2016Team