Accountancy/Quick Reference/Accounting Ratios

Profit-Based Ratios

x Gross Profit Operating Profit (PBIT) Net Profit Profit After Tax
  Gross Profit Margin % Operating Profit Margin % Net Profit Margin %
  ROCE %
  Return on Equity %
  Interest Cover
  Earnings per Share

The table shows how to calculate the ratios by multiplying the row and column headings together. e.g.

Gross Profit Margin % =  

Earnings per Share =  


Sales = Turnover
Equity = Ordinary Share Capital + Reserves
Debt = Long Term Liabilities = Non-Current Liabilities
Capital Employed = Equity + Debt
Asset Turnover = Sales / (Fixed Assets + Net Current Assets)
Fixed Assets + Net Current Assets = Equity + Debt (Accounting Equation)
ROCE = Operating Profit Margin x Asset Turnover