What Financial Ratios are used in the Company Watch system?
The following definitions refer to standard financial ratios given in the Company Watch system and use raw data from the accounts. These financial ratios are calculated strictly according to the formulas below, using only the latest financial accounts data filed by a company, with no H-Score included in the calculation.
The financial ratios can be found on the left-hand side of each company profile under Financial Data > Other > Financial Ratios.
UK definitions
Profitability
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Operating margin (%): (Operating profit / Sales) x 100
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Pre-tax margin (%): (PBT / Sales) x 100
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Return on Net Worth (%): (PBT / Net Worth) x 100
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Return on capital employed: ((PBT + Interest paid ) / (Total Assets - Current liabilities)) x 100
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Return on Assets (%): ((PBT + Interest paid) / Total Assets) x 100
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Interest cover: (Operating profit + Interest & other income) / Interest paid
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Dividend cover: (Profit after tax + Other post-tax items) / Dividends
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Tax rate: (Tax / PBT) x 100
Trading/Funding
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Sales: Tangible fixed assets: Sales / (Fixed assets – Other fixed assets – Intangibles)
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Sales: Net Worth: Sales / Net Worth
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Gearing (%): ((Short term debt + Long term debt – Cash) / Net Worth) x 100
Liquidity
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Current ratio: Current assets / Current liabilities
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Acid Test Ratio: (Current assets – Stock & WIP) / Current liabilities
Working Capital: Sales
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Stock days: (Stock & WIP x 365) / Sales
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Trade debtor days: (Trade debtors x 365) / Sales
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All other debtor days: ((Other debtors + Group debtors) x 365) / Sales
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Trade creditor days: (Trade creditors x 365) / Sales
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All other creditor days: ((Other creditors + Accruals & deferred income + Group creditors x 365) / Sales
Employees
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Sales per head: Sales / Employee numbers
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PBT per head: PBT / Employee numbers
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Employee costs per head: Employee costs / Employee numbers
Other Ratios
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Tangible debt gearing (%): ((Short term debt + Long term debt)/(Net worth – Intangible fixed assets)) x 100
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Leverage: ((Current liabilities + Long term liabilities)/(Net worth – Intangible fixed assets)) x 100
IE definitions
Profitability
-
Operating margin (%): (Operating profit / Sales) x 100
-
Pre-tax margin (%): (PBT / Sales) x 100
-
Return on Net Worth (%): (PBT / Net Worth) x 100
-
Return on capital employed: ((PBT + Interest paid ) / (Total Assets - Current liabilities)) x 100
-
Return on Assets (%): ((PBT + Interest paid) / Total Assets) x 100
-
Interest cover: (Operating profit + Interest & other income) / Interest paid
-
Dividend cover: (Profit after tax + Other post-tax items) / Dividends
-
Tax rate: (Tax / PBT) x 100
Trading/Funding
-
Sales: Tangible fixed assets: Sales / (Fixed assets – Other fixed assets – Intangibles)
-
Sales: Net Worth: Sales / Net Worth
-
Gearing (%): ((Short term debt + Long term debt – Cash) / Net Worth) x 100
Liquidity
-
Current ratio: Current assets / Current liabilities
-
Acid Test Ratio: (Current assets – Stock & WIP) / Current liabilities
Working Capital: Sales
-
Stock days: (Stock & WIP x 365) / Sales
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Trade debtor days: (Trade debtors x 365) / Sales
-
All other debtor days: ((Other debtors + Group debtors) x 365) / Sales
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Trade creditor days: (Trade creditors x 365) / Sales
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All other creditor days: ((Other creditors + Accruals & deferred income + Group creditors x 365) / Sales
Employees
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Sales per head: Sales / Employee numbers
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PBT per head: PBT / Employee numbers
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Employee costs per head: Employee costs / Employee numbers
Other Ratios
-
Tangible debt gearing (%): ((Short term debt + Long term debt)/(Net worth – Intangible fixed assets)) x 100
-
Leverage: ((Current liabilities + Long term liabilities)/(Net worth – Intangible fixed assets)) x 100