FINANCIAL RATIOS (I)

............................. involves the calculation and interpretation of key financial performance indicators to provide useful insights.

• Net profit margin

• Gross profit margin

• Operating profit margin

• Ratio analysis

• Ration analysis

.............................is the ratio of a company's loan capital (debt) to the value of its ordinary shares (equity).

• Gearing

• Gross profit margin

• Operating profit margin

• Ratio analysis

• Ration analysis

Financial information is always prepared to satisfy in some way the needs of various interested parties otherwise referred to as....................................

• Customers

• Suppliers

• Users of accounts

• Competitors

• Government

Stakeholders in the business (whether they are internal or external to the business) seek information to find out all of the following except

• The product line of a business

• How is the business trading

• How strong is the financial position

• What are the future prospects for the business

Where does the information for ratio analysis come from?

• Cash flow statement and Income statement

• Cash flow statement and Balance sheet

• Balance sheet and Income statement

• Profit and Loss

• Statement of operations

Information such as Revenue, Cost of sales, Gross Profit, Operating profit and Net profit are gotten from

• Balance Sheet

• Cash flow statement

• Income statement and Balance sheet

• Income statement and cash flow statement

• Income statement

Information such as current assets, current liabilities, inventories, trade receivables and payables are gotten from

• Balance Sheet

• Cash flow statement

• Income statement and Balance sheet

• Income statement and cash flow statement

• Income statement

The key stages in ratio analysis are

• Gather data, calculate ratios, interpret results and take action

• Calculate ratios, gather data, interpret results and take action

• Interpret results, gather data, calculate ratios and take action

• Take action, calculate ratios, interpret results and gather data

• Gather data, interpret results, calculate ratios and take action

Gross profit margin, operating profit margin, Net profit margin, ROCE are examples of what ratios

• Liquidity

• Profitability

• Shareholders return

• Financial efficiency

Current ratio and acid-test ratio are examples of what group of ratios?

• Liquidity

• Profitability

• Shareholders return

• Financial efficiency