Accouting question 5 Interpretation of accounts ratio. ROSF Gearing Interest cover Earning per share Price earnings Dividend per share Price dividend ratio dividend yield dividend cover cost of sales Average stock Debt / equity current ratio Acid Test Stock turnover debtors days creditors days ROCE

1. A C C O U N T I N G
R AT I O S

2. R E T U R N O N S H A R E H O L D E R S
F U N D S ( R O S F )
𝒏𝒆𝒕 𝒑𝒓𝒐𝒇𝒊𝒕 − 𝑷𝒓𝒆𝒇𝒆𝒓𝒆𝒏𝒄𝒆 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅𝒔
𝒐𝒓𝒅𝒊𝒂𝒏𝒓𝒚 𝒔𝒉𝒂𝒓𝒆 𝒄𝒂𝒑𝒕𝒊𝒂𝒍 + 𝑹𝒆𝒔𝒆𝒓𝒗𝒆𝒔
𝒙
𝟏𝟎𝟎
𝟏
Answer = _%

3. G E A R I N G
𝑫𝒆𝒃𝒕 𝒄𝒂𝒑𝒕𝒊𝒂𝒍
𝑪𝒂𝒑𝒕𝒊𝒂𝒍 𝑬𝒎𝒑𝒍𝒐𝒚𝒆𝒅
𝒙
𝟏𝟎𝟎
𝟏
Answer = _%

4. I N T E R E S T C O V E R
𝒏𝒆𝒕 𝒑𝒓𝒐𝒇𝒊𝒕 𝒃𝒆𝒇𝒐𝒓𝒆 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 + 𝒅𝒆𝒏𝒆𝒏𝒕𝒖𝒓𝒆 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 − 𝒊𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕 𝒊𝒏𝒄𝒐𝒎𝒆
𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕
Answer = _ Times

5. E A R N I N G S P E R S H A R E
( E P S )
𝒑𝒓𝒐𝒇𝒊𝒕 − 𝒑𝒓𝒆𝒇𝒆𝒓𝒆𝒏𝒄𝒆 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅𝒔
𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒊𝒔𝒔𝒖𝒆𝒅 𝒐𝒓𝒅𝒊𝒏𝒂𝒓𝒚 𝒔𝒉𝒂𝒓𝒆𝒔
𝒙
𝟏𝟎𝟎
𝟏
Answer = _cent

6. P R I C E E A R N I N G S
( P / E )
𝑴𝒂𝒓𝒌𝒆𝒕 𝒑𝒓𝒊𝒄𝒆 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆 (𝑴𝑷𝑺)
𝑬𝒂𝒓𝒏𝒊𝒏𝒈𝒔 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆 (𝑬𝑷𝑺)
Answer = _ Years

7. R E T U R N O N C A P I TA L E M P L O Y E D
( R O C E )
𝑷𝒓𝒐𝒇𝒊𝒕 𝒃𝒆𝒇𝒐𝒓𝒆 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕
𝒄𝒂𝒑𝒊𝒕𝒂𝒍 𝒆𝒎𝒑𝒍𝒐𝒚𝒆𝒅
𝒙
𝟏𝟎𝟎
𝟏
Answer = _%

8. D I V I D E N D P E R S H A R E
( D P S )
𝒕𝒐𝒕𝒂𝒍 𝒐𝒓𝒅𝒊𝒏𝒂𝒓𝒚 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅
𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒊𝒔𝒔𝒖𝒆𝒅 𝒐𝒓𝒅𝒊𝒏𝒂𝒓𝒚 𝒔𝒉𝒂𝒓𝒆𝒔
𝒙
𝟏𝟎𝟎
𝟏
Answer = _ cent

9. P R I C E D I V I D E N D R AT I O
𝑴𝒂𝒓𝒌𝒆𝒕 𝒑𝒓𝒊𝒄𝒆 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆 (𝑴𝑷𝑺)
𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆 (𝑫𝑷𝑺)
Answer = _ years

10. D I V I D E N D Y I E L D
𝑫𝒊𝒗𝒊𝒅𝒆𝒏𝒅 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆 (𝑫𝑷𝑺)
𝑴𝒂𝒓𝒌𝒆𝒕 𝒑𝒓𝒊𝒄𝒆 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆 (𝑴𝑷𝑺)
𝒙
𝟏𝟎𝟎
𝟏
Answer = _%

11. D I V I N E D C O V E R
𝑷𝒓𝒐𝒇𝒊𝒕 − 𝒑𝒓𝒆𝒇𝒆𝒓𝒆𝒏𝒄𝒆 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅
𝑻𝒐𝒕𝒂𝒍 𝒐𝒓𝒅𝒊𝒏𝒂𝒓𝒚 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅
Answer = _ Times

12. C O S T O F S A L E S
( C O S )
Opening stock + Purchases – Closing stock
Answer = €_

13. AV E R A G E S T O C K
𝑶𝒑𝒆𝒏𝒊𝒏𝒈 𝒔𝒕𝒐𝒄𝒌 + 𝒄𝒍𝒐𝒔𝒊𝒏𝒈 𝒔𝒕𝒐𝒄𝒌
𝟐
Answer = €_

14. D E B T / E Q U I T Y
Debt Capital : Equity Capital
Answer = €_

15. C U R R E N T R AT I O
Current Assets : Current Liabilities
2:1
Answer = €_

16. A C I D T E S T
Current Assets (less closing stock) : Current Liabilities
2:1
Answer = €_

17. S T O C K T U R N O V E R
𝒄𝒐𝒔𝒕 𝒐𝒇 𝒔𝒂𝒍𝒆𝒔 (𝑪𝑶𝑺)
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝒔𝒕𝒐𝒄𝒌
Answer = €_

18. D E B T O R S D AY S
𝒅𝒆𝒃𝒕𝒐𝒓𝒔
𝒄𝒓𝒆𝒅𝒊𝒕 𝒔𝒂𝒍𝒆𝒔
𝒙
𝟏𝟐
𝟏
Answer = €_

19. C R E D I T O R S D AY S
𝑪𝒓𝒆𝒅𝒊𝒕𝒐𝒓𝒔
𝒄𝒂𝒔𝒉 𝒑𝒖𝒓𝒄𝒉𝒂𝒔𝒆𝒔
𝒙
𝟏𝟐
𝟏
Answer = €_

20. C R E D I T O R S D AY S
Total Purchases – Credit Purchases = Cash
Purchases
Answer = €_