LIQUIDITY RATIOS

• Current ratio = current assets / current liabilities

Safest ratio is 2:1 or 3:1

• Acid test ratio = (currents assets - inventories) / current liabilities

Safest ratio is 1.5:1

PROFITABILITY RATIOS

• Return on capital employed (ROCE) = (Net profit / capital employed) * 100

• Net Profit Margin (Profit Margin) = (Net profit / revenue) * 100

• Gross Profit Margin = (Gross profit / revenue) * 100

OTHER FORMULAS (idk how to classify)

• Net cash flow = cash inflow - cash outflow

• Working capital = current assets - current liabilities

• Social cost = external cost + private cost

• Social Benefit = external benefit + private benefit

• Break-even = fixed cost / (selling price-variable cost)

• Profit = revenue - cost of production

• Gross Profit = revenue - cost of sales

• Net Profit = gross profit - (expenses + overheads)

• Retained Profit = net profit - (tax + dividends)

• Total Assets = current assets + non current assets

• Total Liabilities = current liabilities + non current liabilities

• Owner's equity(shareholder funds in a limited company) = total assets - total liabilities

• Capital employed = shareholder's funds + non current liabilities

• Margin of safety= (Current sales level – Breakeven point / Current sales level) * 100

• Revenue= Quantity sold * price

• Productivity= Output / Quantity of input

• Labor Productivity= Output / number of employees

• Profit from break even graph= Total revenue – total costs OR TR – TA

• Total costs = fixed costs = variable costs

• Average costs = Total costs / Total number of units produced

• Contribution Per unit = Selling price – Variable costs