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Calculation and understanding of accounting ratios
Understand, compute, and explain the significance of key accounting ratios including gross margin, profit margin, return on capital employed (ROCE), current ratio, liquid (acid test) ratio, inventory turnover rate (times), trade receivables turnover (days), and trade payables turnover (days).
1
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10
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7
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44 min
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CambridgeIGCSEAccountingAnalysis and interpretation
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Calculation and understanding of accounting ratios outcomes1 objectives
- Understand, compute, and explain the significance of key accounting ratios including gross margin, profit margin, return on capital employed (ROCE), current ratio, liquid (acid test) ratio, inventory turnover rate (times), trade receivables turnover (days), and trade payables turnover (days).
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