https://padlet.com/henrymurphy1_1/y2eqotpntmr7 Made with a creative frenzy en-us 2018-05-06 23:33:44 UTC 2025-10-26 17:20:18 UTC hello@padlet.com henrymurphy1_1 https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258358985 Profitability Ratios
Liquidity Ratios
Efficiency Ratios]]> 2018-05-06 23:41:20 UTC https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258358985 https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258360259 Gross profit ratio= gross profit x 100/sales
 shows how effectively a business controlled it's cost of goods 
 The higher the better. Allows the firm to assess the impact of its sales and how much it cost to generate (produce) those sales 


Net profit ratio=net profit x 100/ sales 
shows how effectively the expenses of the business are controlled 
 A high net profit margin means a company is able to control its costs that buy goods and services at prices significantly higher than it costs to produce or provide them. 
 A company with a low or negative net profit margin can potentially increase its profitability by taking steps to reduce costs and increase sales.]]> 2018-05-06 23:51:38 UTC https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258360259 https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258360289 Current Ratio = Current Assets/Current Liabilities
This ratio compares the ability to use current assets to pay current liabilities. Ideal ratio is 2:1.
 
Acid Test Ration = (Current Assets - Inventory)/Current Liabilities
This ratio shows if there is enough cash assets to pay current liabilities. Stock is the least cash hence it is subtracted. I deal ratio is 1:1]]> 2018-05-06 23:51:51 UTC https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258360289 https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258361077 An efficiency ratio measures a company's ability to use its assets to generate income.
Debtors turnover :
-is an accounting measure used to quantify a firm's effectiveness in extending credit and in collecting debts on that credit.

Debtors turnover = net credit sales / average trade receivables

-A high debtors turnover ratio may suggest that a company operates on a cash basis. It may also indicate that the company’s collection of accounts receivable is efficient, and that the company has a high proportion of quality customers that pay off their debts quickly.
-A low ratio, in a similar way, can also suggest a few things about a company, such as that the company may have poor collecting processes, a bad credit policy or none at all, or bad customers or customers with financial difficulty.
-Therefore having a high ratio is better

Creditos turnover :
-The accounts payable turnover ratio is a short-term liquidity measure used to quantify the rate at which a company pays off its suppliers.

Creditors turnover = total supplier purchases / average trade payables

-if the ratio is falling from one period to another, this is a sign that the company is taking longer to pay off its suppliers than it was in previous time periods. 
-The opposite is true when the turnover ratio is increasing, which means that the company is paying off suppliers at a faster rate.


]]> 2018-05-06 23:56:22 UTC https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258361077 henrymurphy1_1 https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258363523 -Government
-Banks
-Shareholders
-Creditors
-Competitors
-Employees/Trade Unions]]> 2018-05-07 00:16:44 UTC https://padlet.com/henrymurphy1_1/y2eqotpntmr7/wish/258363523