 FORMULAE

1. Assets = Capital + Liabilities

2. Net Current Assets (Working Capital) = Current Assets – Current Liabilities

3. Current (Working Capital) Ratio = Current Assets

Current Liabilities

4. Return on Capital Employed = Profit before Interest x 100

(ROCE) Capital Employed

5. Net Profit Percentage = Net Profit __ x 100

Sales (Revenue)

6. Gross Profit Percentage = Gross Profit x 100

Sales (Revenue)

7. Stock/Inventory Turnover = Cost of Sales (Cost of Goods Sold)

Average Inventory

8. Acid Test Ratio = Current Assets – Inventory

Current Liabilities

9. Current (working capital) Ratio = Current Assets

Current Liabilities

10. Trade Receivables to Sales = Accounts Receivables x 365

Credit Sales for the year

11. Trade Payables to Purchases = Trade Payables x 365

Credit Purchases for the year

12. Average Inventory = Opening Inventory + Closing Inventory

2

13. Rate of Inventory Turnover (Inventory Turnover) =

Cost of Goods Sold (Cost of Sales)

Average Inventory

14. Straight line method of calculating depreciation =

Cost – Disposal Value

Number of years

CXC 10/G/SYLL 17 37