VCE Profitability intro

Category: Education

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Profitability: Profit/Loss Statement COGS ratio G.P. ratio Adj. G.P. ratio Exps. ratio Net Profit ratio

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Profitability: other Return on assets ratio For every $ of ave. assets, business makes X cents profit. Return on investment ratio For every $ of ave. owner’s investment, business makes X cents profit.

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Efficiency KPI’s Efficiency: relates to the quality of management, i.e., how well the assets are managed or used or utilised. The skill to minimise waste, maximise return. Stock turnover, done Debtors turnover, done Creditors turnover (not an asset!), done Asset turnover or Sales turnover, new

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Liquidity KPIs Definition of liquidity Best liquidity indicator is the Cash Budget (projected)

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