FIRST PUBLISH OCTOBER 2024
ACCA FA-Interpretation of financial
statements, Ratios Study Guide Solutions
Gross Profit Margin - ANSWER✔✔Gross profit/sales revenue x 100
Operating Profit Margin - ANSWER✔✔Operating profit / sales revenue x 100
Current Ratio - ANSWER✔✔current assets/current liabilities
Quick/Acid Ratio - ANSWER✔✔(Current Assets - Inventory) / Current Liabilities
Asset Turnover - ANSWER✔✔Revenue/Capital employed
Inventory holding period - ANSWER✔✔Inventory/ Cost of sales X 365
Trade receivables collection period - ANSWER✔✔Trade receivables / credit sales x 365
Trade payables payment period - ANSWER✔✔Trade payables / credit purchases x 365
Return on capital employed (ROCE) - ANSWER✔✔Operating profit / capital employed x 100
Debt to Equity Ratio - ANSWER✔✔Long term loans / Equity x 100
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