Tag: Ratio Formula

working capital turnover ratio

Working Capital Turnover Ratio

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.

Last modified October 30th, 2019 by Michael Brown
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quick ratio formula

Quick Ratio or Acid Test Ratio

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.

Last modified May 23rd, 2023 by Michael Brown
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overhead ratio formula

Overhead Ratio

The overhead ratio is the overheads of the business expressed as a percentage of the revenue (sales). It is calculated by dividing overheads by revenue.

Last modified March 2nd, 2023 by Michael Brown
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debt equity ratio formula

Debt Equity Ratio

The debt equity ratio is the ratio of how much a business owes (debt) compared to how much the owners have invested (equity). It is calculated by dividing debt by equity.

Last modified February 14th, 2023 by Michael Brown
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return on equity

Return on Equity – ROE

The return on equity measures the percentage rate of return the owner of a business gets on their investment. It is calculated by dividing the profit after tax by the owners equity. It is sometimes abbreviated to ROE and also known as the Return on Net Worth.

Last modified October 21st, 2019 by Michael Brown
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current ratio formula

Current Ratio

The current 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 by current liabilities. It is also known as the Working Capital Ratio.

Last modified September 28th, 2022 by Michael Brown
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gross profit percentage formula

Gross Profit Percentage

The gross profit percentage is the gross profit (sometimes called gross margin) 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 gross profit by revenue.

Last modified January 13th, 2023 by Michael Brown
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fixed asset turnover ratio

Fixed Asset Turnover Ratio

The Fixed Asset Turnover ratio shows the revenue generated for every pound of your investment in fixed assets. It is a measure of the efficiency with which the business uses its resources. It is calculated by dividing revenue by fixed assets

Last modified February 14th, 2023 by Michael Brown
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asset turnover ratio formula

Asset Turnover Ratio

The asset turnover ratio shows the revenue generated by your assets. It is a measure of the efficiency with which the business uses its resources. It is calculated by dividing revenue by assets

Last modified October 11th, 2022 by Michael Brown
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gearing ratio formula

Gearing Ratio Analysis

The gearing ratio is the ratio of how much a business owes (debt) compared to how much the owners have invested (equity). It is calculated by dividing debt by equity.

Last modified January 17th, 2020 by Michael Brown
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debtor days ratio

Debtor Days Ratio

The Debtor Days ratio shows the average number of days your customers are taking to pay you. It is calculated by dividing debtors by average daily sales.

Last modified February 13th, 2023 by Michael Brown
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