| Profitability | Where to look/how to calculate | Used to/Issue |
| 1. Return on Capital Employed (rate of return) | ROTA (PBIT/total assets x 100) | |
| RONA (PBIT/(total assets – current liabilities) x 100) |
| 2. Return on Sales | ROS (PBIT/sales x 100) | |
| 3. Sales Generation (asset turnover) | SG (sales/total assets) | Increase if ROS falls |
| SG (sales/(total assets – current liabilities)) |
| Working Capital/Liquidity | Where to look/how to calculate | Used to/Issue |
| 4. Current Ratio | (Current Assets/(Creditors (amount falling due within one year))) | |
| 5. Liquid Ratio | (Liquid assets/(Creditors (amount falling due within one year))) | |
| 6. Stock Days | (Stocks/(Average daily cost of sales (PL: sales cost/365)) | |
| 7. Debtors Days | (Trade Debtors + Customer advances / Average daily sales) | |
| 8. Creditor Days | (Trade Creditors/Average daily cost of sales) | |
| Financial Structure/ Investors Criteria | Where to look/how to calculate | Used to/Issue |
| 1. Gearing (Leverage in US) | (Debt/Shareholders fund x 100) | Purpose is to identify financial risk in a certain capital structure. The higher borrowings the higher the risk. >50% risky <20% conservative |
| Affects cost of capital but not cash. Tax relief on interest not on dividend. Low RONA + high Gearing = good ROE. |
| 2. Interest Cover | (PBIT/Interest payable) | |
| 3. Return on Equity | ROE (Profit available for distribution to shareholders/Shareholders funds x 100) | Important to balance shareholders fund and outside borrowing (RONA & Gearing balance). |
| 4. Earnings Per Share | EPS (P&L account) | |
| 5. Dividend Per Share | (note to accounts) | |
| 6. Dividend Cover | (Profit available for distribution to shareholders/Dividends) | |
| 7. Dividend Yield | “Gross” (Dividends per share/share price) | |
| 8. P/E ratio | (Share price/Earnings per share) | Indicates how many times earnings investors are willing to pay for shares |
| High – indicates that market expects earnings to rise. |
| Corporate ratios | Where to look/how to calculate | Used to/Issue |
| 1. Market/book | (market value/book value of assets) | Indicates how much the market values the company compared to the assets |
| High – added value due to historic performance (successful strategies) and future expectations – puts pressure on future performance |
