Which ratio uses the formula: (gross profit/sales revenue) x 100?
Gross Profit Percentage Ratio
Profit for the Year Percentage
Return on Equity Employed
Which of the following is a method for a business to improve their Profit for the Year Percentage?
Increase the selling price of the product
Decrease expenses
Decrease the gross profit figure
Which of the following formulas is referred to as Return on Equity Employed?
(Profit for the year/opening equity) x 100
(Profit for the year/sales revenue) x100
(Gross profit/sales revenue) x100
Who of the following will often use Return on Equity Employed?
Trustees
Manufacturers
Venture capitalists
Which of the following formulas is referred to as a current ratio?
(current assets – closing inventory): current liabilities
current assets: current liabilities
cost of sales: average inventory
What is the ideal value for a current ratio?
1:2
2:1
1:1
Which of the following formulas is referred to as acid test ratio?
What is the ideal value for an acid test ratio?
1:4
Which ratio uses the formula: cost of sales: average inventory
Rate of inventory turnover
Acid test ratio
Gross profit percentage
Which of the following is a purpose of ratio analysis?
Measuring the human element of a business
Taking external factors into account
Identifying issues that can be resolved