A/AS Level Business Studies - Chapter 32 - Analysis of Published Accounts (A-Level only)

Gearing ratio

(long-term loans/capital employed) x 100

Return on capital employed (%)

(net or operating profit/capital employed) x 100

Days' sales in receivables ratio

accounts receivable x 365/sales turnover

Inventory (stock) turnover ratio

cost of goods sold/value of inventories

Prince/earnings ratio

current share price/earnings per share

Dividend yield ratio (%)

dividend per share x 100/current share price

Dividend cover ratio

profit after tax and interest/annual dividends

Earnings per share

profit after tax/total number of shares => this is the amount of profit earned per share

Share price

the quoted price of one share on the stock exchange

Dividend

the share of the company profits paid to shareholders

Capital employed

the total value of all long-term finance invested in the business. It is equal to (non-current assets + current assets) - current liabilities OR non-current liabilities + shareholders' equity

Dividend per share

total amount dividends/total number of issued shares