Ratio Analysis (Edexcel A-Level Business): Flashcards
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Practise the cards
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Ratio analysis involves
Ratio analysis involves
Calculating relationships between financial values
What gearing ratios examine
What gearing ratios examine
Long-term financial stability and capital structure
Capital employed calculation
Capital employed calculation
(Non-current + Current assets) - Current liabilities
Gearing ratio formula
Gearing ratio formula
(Non-current liabilities ÷ Capital employed) × 100%
High geared threshold
High geared threshold
Above 50%
ROCE meaning
ROCE meaning
Return on Capital Employed
ROCE formula
ROCE formula
(Operating profit ÷ Capital employed) × 100%
Operating profit also called
Operating profit also called
EBIT (Earnings Before Interest and Tax)
Window dressing
Window dressing
Legal account manipulation for favourable presentation
Balance sheet limitation
Balance sheet limitation
Shows snapshot at specific moment, not typical conditions