Interpretation of Accounts (Ratio Analysis) (Leaving Cert Accounting): Flashcards

$\frac{\text{NPBIT}}{\text{Cap employed}} \times 100$

\frac{\text{Net profit - Pref div}}{\text{Ord cap + P&L}} \times 100

1.5 to 2:1

1:1

$\frac{\text{Debentures + Pref shares}}{\text{Capital employed}} \times 100$

Over 50%

$\frac{\text{Net profit - Pref div}}{\text{No. of ord shares}}$

$\frac{\text{DPS}}{\text{Market price per share}} \times 100$

$\frac{\text{Cost of sales}}{\text{Average stock}}$

Historical focus - analyses past performance, not future