Ratio Formula Sheet
Profitability Ratios
(1) Return on Capital Employed = Profit before interest or operating profit x 100
Total non-current liabilities + Total Equity

(2) Return on Equity = Profit for Shareholder
Total Shareholder Equity

(3) Gross Profit Ratio = Gross profit
x 100
Net sales (Turnover or Revenue) Example:
Total sales = $520,000; Sales returns = $ 20,000; Cost of goods sold $400,000 Required: Calculate gross profit ratio.
Calculation:
Gross profit = [(520,000 – 20,000) – 400,000]
= 100,000
Gross Profit Ratio = (100,000 / 500,000) × 100
= 20%
Causes / reasons of increase or decrease in gross profit ratio: It should be observed that an increase in the GP ratio may be due to the following factors. 1. Increase in the selling price of goods sold without any corresponding increase in the cost of goods sold. 2. Decrease in cost of goods sold without corresponding decrease in selling price. 3. Omission of purchase invoices from accounts.

4. Under valuation of opening stock or overvaluation of closing stock. On the other hand, the decrease in the gross profit ratio may be due to the following factors. 1. Decrease in the selling price of goods, without corresponding decrease in the cost of goods sold. 2. Increase in the cost of goods sold without any increase in selling price. 3. Unfavorable purchasing or markup policies.

4. Inability of management to improve sales volume, or omission of sales. 5. Over valuation of opening stock or under valuation of closing stock (4) Net Profit Ratio = (Net profit / Net sales) × 100

Example:
Total sales = $520,000; Sales returns = $ 20,000; Net profit $40,000 Calculation:
Net sales = (520,000 – 20,000) = 500,000
Net Profit Ratio = [(40,000 / 500,000) × 100]
= 8%
Significance: NP ratio is used to measure the overall profitability and...

...RATIOS
I. Short-term Solvency OR
Liquidity:
1. Current Ratio
2. Quick OR Acid Test Ratio
3. Net Working Capital
4. Super Quick RatioFORMULA
Current Assets
Current Liabilities
Cash + marketable securities +
receivables (net)
Current Liabilities
Net Current Assets – Current
Liabilities
Cash + marketable securities
Current Liabilities
II. Activity OR Turnover OR
Efficiency Ratio:
1....

...Lowe’s Ratio Analysis
In the period from 1997-2001 Lowe’s showed a steady increase in working capital. It went from being $2110 million in 1997 to $4920 million in 2001. This shows the company had good amount of liquid assets to conduct and build its business. Lowe’s fixed assets went from $3005 million in 1997 to $8653 million in 2001. Total capital is found by taking working capital and adding it to fixed assets. Lowe’s total capital increased from $5219 million in 1997 to...

...Patton-Fuller Ratio Computation
Shourn Henderson, Marilyn Lilly, Noralva Rodriguez
HCS/405
February 11, 2013
Dr. Ben Kukoyi
Patton-Fuller Ratio Computation
Introduction
This paper will address the ratio computations to Patton-Fuller Community Hospital taken from Audited and Unaudited Reports from 2008-2009. From 2008-2009 the existing assets reduced, but showed a growth in the hospital’s responsibilities. The hospital is presently...

...Profitablity Ratio Analysis
This analysis ratio based on FAME report and annual report of Thortons (PLC) from 2007 to 2010.
1. Gross Profit Margin
During period 2007-2010, Thorntons was achieved the highest gross profit margin in 2007. It was increased the sales/revenue 5.3% (from ₤ 176.60m to 186.00 m). In 2008 the sales was increased 11.9% (from ₤ 186.00m to 208.12 m) however the gross profit margin was decreased due to the high cost of good sales...

...
Ratio Analysis
Cynthia Nelson
HCS/571
September 2 2013
Joseph Rudd
Ratio Analysis
Financial ratio analysis is the calculation and comparison of ratios pulled from the information in a company’s financial statements (Cleverly & Song, 2011). The financial report is used by organization to determine the financial health and stability of an organization. The ratios analysis data are found on the business Profit and Loss...

...Tootsie Roll
Net Profit Margin:
Earnings Before Tax (EBT) – Taxes/Net Product Sales OR Net income/Sales
Net Profit Margin is a ratio of profitability that measures how much out of every dollar of sales a company actually keeps in earnings. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors.
43938/528369 = 8.32%
This is above industry average of 7.23%.
Tootsie Roll’s profit margin is 8.32%, meaning...

...FORMULAS
All four of these formulas use the following terms: inequality, equivalent, and interval. Formula numbers one, two, and three use the term compound inequality. Formula number four uses the term infinity. In these formulas I am going to figure out the weight amounts, better known as (w). Formulas are definitely something that I have had to re-teach myself. They are not super complicated; but, at...