Analysis and Interpretation of Financial Statements (Grade 12 NSC Matric Accounting): Flashcards

Profitability, Liquidity, Solvency, Return, Financial risk/Gearing

Efficiency in normal operating activities

Ability to pay immediate short-term debts

Ability to pay all debts (short-term and long-term)

$\frac{\text{Current assets}}{\text{Current liabilities}}$

$\frac{\text{CA - Inventories}}{\text{Current liabilities}}$

$\frac{\text{Gross profit}}{\text{Sales}} \times 100$

$\frac{\text{Net profit after tax}}{\text{Issued shares}} \times 100$

Current ratio > 2:1, acid test ratio > 1:1

Extent company is financed by borrowed money