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Gross Profit Margin:
(Gross Profit / Sales) x 100 = ______%
Net Profit Margin:
(Net Profit / Sales) x 100 = _____%
Stock Turnover Ratio
Cost of Goods Sold / Average Stock = ______ times
Cost of Goods Sold = Sales - Gross Profit
Average Stock = Opening Stock + Closing Stock / 2
If opening stock is not given treat closing stock as opening stock
Debtor Collection Period
(Debtors / Sales) x 365 = ______ days
Creditor Payment Period
(Creditors / Purchases) x 365 = _________days
Return on Capital Employed
(Net Profit / Capital) x 100 = _________%
Current Ratio
Current Assets / Current Liabilities = ____:____
Quick Ratio/Acid Test Ratio
Current Assets - Stock / Current Liabilities
Current Assets = Cash/Bank + Debtors + Prepayments
Current Liabilities = Creditors + Overdrafts Accruals
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What are the limitations of financial statement analysis?
Use and Limitations of Financial statement analysis (using Ratios)Attention should be given to the following issues when using financial ratios:A reference point is needed. To to be meaningful, most ratios must be compared to historical values of the same firm, the firm's forecasts, or ratios of similar firms.Most ratios by themselves are not highly meaningful. They should be viewed as indicators, with several of them combined to paint a picture of the firm's situation.Year-end values may not be representative. Certain account balances that are used to calculate ratios may increase or decrease at the end of the accounting period because of seasonal factors. Such changes may distort the value of the ratio. Average values should be used when they are available.Ratios are subject to the limitations of accounting methods. Different accounting choices may result in significantly different ratio values.
What are the most important accounting principles?
There are many accounting principles and many are very important in their own way. The top three most important principles are: Economic Accounting Principle, Monetary Unit Assumption, and Time Period Assumption.
What are the principles of government accounting?
Fund accounting is the most important principle of government accounting. Separate funds are used to make it easier to account for all governmental costs.
What is the most important financial metric to review to determine long-term financial viability?
Solvency ratios are the most important financial metric systems used to determine long term viability. These ratios analyze how long it will take to pay off obligations that are long term.
What is principal of accounting?
The most important of the accounting is to comply with generally accepted accounting principles and standards and norms that conducted by accounting organizations. Accounting must have qualities characteristics. With these characteristics, it will be useful to users. Example for characteristics: relevance, reliability and comparability
What are the limitations of financial statement analysis?
Use and Limitations of Financial statement analysis (using Ratios)Attention should be given to the following issues when using financial ratios:A reference point is needed. To to be meaningful, most ratios must be compared to historical values of the same firm, the firm's forecasts, or ratios of similar firms.Most ratios by themselves are not highly meaningful. They should be viewed as indicators, with several of them combined to paint a picture of the firm's situation.Year-end values may not be representative. Certain account balances that are used to calculate ratios may increase or decrease at the end of the accounting period because of seasonal factors. Such changes may distort the value of the ratio. Average values should be used when they are available.Ratios are subject to the limitations of accounting methods. Different accounting choices may result in significantly different ratio values.
What are the two most important indicators of a heart attack?
Pain and sweating
What are the most important accounting principles?
There are many accounting principles and many are very important in their own way. The top three most important principles are: Economic Accounting Principle, Monetary Unit Assumption, and Time Period Assumption.
Which three gauges of indicators are the most important to be aware of?
Fuel, coolant, voltage
What are the most important financial indicators of a banking institution?
Net write back
Which three gauges or indicators are the most important to aware of?
Fuel, coolant, voltage
Which three gauges or indicators are the most important to be aware of?
Fuel, coolant, voltage
The most important output of the accounting cycle is the financial statements?
true
What are the principles of government accounting?
Fund accounting is the most important principle of government accounting. Separate funds are used to make it easier to account for all governmental costs.
How has ATM helped in Accounting system?
ATM helped in accounting system in various ways. But the most important that ATM helped to maintain the accounting records up-to-date.
What fields of study use ratios?
Ratios are used in biology, astronomy and math. Most every science where comparisons are made (and that is just about every science) requires a good understanding of ratios. They are particularly important in medicine, in mixing dosages.
What is principal of accounting?
The most important of the accounting is to comply with generally accepted accounting principles and standards and norms that conducted by accounting organizations. Accounting must have qualities characteristics. With these characteristics, it will be useful to users. Example for characteristics: relevance, reliability and comparability
