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Flashcards in Financial Management Deck (9)
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1
Q

Margin of Safety (%) =

A

(Expected Sales - Breakeven Sales)/Expected Sales

2
Q

Gross Profit Margin =

A

(Gross Profit/Sales) x 100

3
Q

Net Profit Margin =

A

(Net Profit Before Interest and Tax/Sales) x 100

4
Q

Average Stock Turnover Period =

A

(Average Stock Held/Cost of Sales) x 365

5
Q

Average Settlement Period for Debtors =

A

(Trade Debtors/Credit Sales) x 365

6
Q

Average Settlement Period for Creditors =

A

(Trade Creditors/Credit Purchases) x 365

7
Q

Current Ratio =

A

Current Assets/Current Liabilities

8
Q

Gearing Ratio =

A

Long Term Liabilities/(Share Capital+Long Term Liabilities)

9
Q

Variances Formulas

A

All (Actual - Flexed Budget) except Sales Volume Variance (which is original profit - flexed profit)