Scribd
Upload
133 views3 pages

A Levels Accounting Formulas

The Cambridge International AS & A Level Accounting 9706 syllabus for 2023, 2024, and 2025 outlines key financial ratios used in accounting, including profitability, liquidity, efficiency, solvency, and investment ratios. It provides formulas for calculating various ratios such as gross profit margin, current ratio, and earnings per share. The document emphasizes the importance of using year-end balances for calculations unless specified otherwise.

Uploaded by

msmonicalee.my
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
133 views3 pages

A Levels Accounting Formulas

The Cambridge International AS & A Level Accounting 9706 syllabus for 2023, 2024, and 2025 outlines key financial ratios used in accounting, including profitability, liquidity, efficiency, solvency, and investment ratios. It provides formulas for calculating various ratios such as gross profit margin, current ratio, and earnings per share. The document emphasizes the importance of using year-end balances for calculations unless specified otherwise.

Uploaded by

msmonicalee.my
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Cambridge International AS & A Level Accounting 9706 syllabus for 2023, 2024 and 2025.

Subject content

Appendix – Summary of commonly used ratios (AS & A Level)


Profitability ratios
Gross profit
Gross profit margin (%) × 100
Revenue

Gross profit
Mark-up (%) × 100
Cost of sales

Profit for the year


× 100
Revenue
Profit margin (%) can also be expressed as
Profit for the year (after interest)
× 100
Revenue

Profit from operations


× 100
Return on capital employed (%) Capital employed
Capital employed = issued shares + reserves + non-current liabilities

Expenses
Expenses to revenue ratio (%) × 100
Revenue

Operating expenses to revenue Operating expenses


× 100
ratio (%) Revenue

Liquidity ratios
Current assets
Current ratio Current liabilities
Answer presented as a ratio

Current assets – inventory


Acid test ratio Current liabilities
Answer presented as a ratio

26 www.cambridgeinternational.org/alevel Back to contents page


Cambridge International AS & A Level Accounting 9706 syllabus for 2023, 2024 and 2025. Subject content

Efficiency ratios
Net revenue
Non-current asset turnover (times)
Total net book value of non-current assets

Trade receivables
Trade receivables turnover (days) × 365 days
Credit sales

Trade payables
Trade payables turnover (days) × 365 days
Credit purchases

Average inventory
Inventory turnover (days) × 365 days
Cost of sales

Cost of sales
Rate of inventory turnover (times)
Average inventory

Solvency and other ratios (A Level only)


Trade receivables turnover (days) + inventory turnover (days) –
Working capital cycle (days)
trade payables turnover (days)

Net working assets


× 100
Net working assets to revenue Revenue (sales)
(sales) (%)
Net working assets = inventories + trade receivables – trade payables

Profit from operations


Interest cover (times)
Interest payable

Fixed cost capital


× 100
Total capital
Gearing (%) which is
Non-current liabilities
× 100
Issued ordinary share capital + all reserves + non-current liabilities

Back to contents page www.cambridgeinternational.org/alevel 27


Cambridge International AS & A Level Accounting 9706 syllabus for 2023, 2024 and 2025. Subject content

Investment ratios (stock exchange ratios) (A Level only)


Profit for the year
Earnings per share
Number of issued ordinary shares

Market price per share


Price/earnings
Earnings per share

Annual ordinary dividend


Number of issued ordinary shares
Dividend per share where
Annual ordinary dividend = interim dividend paid + final dividend
proposed

Dividend per share


Dividend yield
Market price per share

Profit for the year available to pay ordinary dividend


Dividend cover
Annual ordinary dividend

Calculate ratios using year-end balances where appropriate, unless the question specifies the use of
average figures.
Calculate ratios to the number of decimal places required by the question.

28 www.cambridgeinternational.org/alevel Back to contents page

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy