Formulas

• What is the formula for capital employed?

  Capital employed = shareholder funds + long term liabilities
• How is sales revenue calculated?


  Sales Revenue = Number of Units Sold × Price per Unit
• What does a gearing ratio of 40% indicate?


  It is seen as a steady rate for long-term liabilities relative to capital employed
• How is the gearing ratio calculated?

  Gearing ratio = (long-term liabilities / capital employed) × 100
• What is the current ratio formula?

  Current ratio = current assets / current liabilities
• What are the key financial ratios discussed in the study material?

  • Total net assets
  • Working capital
  • Capital employed
  • Depreciation
  • Sales Revenue
  • Gross Profit
  • Net Profit
  • ROCE
  • Gearing ratio
  • Current ratio
  • Acid ratio