Page 73 - CAPE Financial Services Syllabus Macmillan_Neat

Appendix I

 FINANCIAL SERVICES FORMULAE

RATIOS FORMULAE
LIQUIDITY
Net Working Capital −
Current
Quick (acid test)
Receivables turnover
Free cash flow
−
ACTIVITY
Inventory turnover
Average collection period
Average payment period
Fixed asset turnover
Total asset turnover ℎ −
− ℎ
DEBT
Degree of indebtedness:
Debt ratio
Debt-equity ratio

Ability to service debts:
Times interest earned ratio

ℎ

−

ℎ′

CXC A38/U2/16 68