Performance Ratios & Costing Methods
Ratios
Net Profit / Sales Revenue * 100%
Gross Profit / Sales Revenue * 100%
Current Assets / Current Liabilities
Acid Test Ratio = current assets – stock / current liabilities
Gearing = Long Term Liabilities / long term lia + share capital + retained profit and reserves
ROCE = net profit / capital employed * 100%
Stock Turnover = Average Stock / Cost of sales
Debtor period in months of year = debtors/sales revenue * 12
Creditor period = creditors / cost of sales
Marginal Costing
Costing at direct costs (variable)
Absorption Costing
Estimated Overheads / Estimated stock + Direct Costs
Depreciation
Straight Line =
Cost of product – residual value / life time in years
Reducing Balance Method =
