PEV  Ratio Analysis
princess
Registered Posts: 80 Regular contributor โญ
Hello
I am resiting this paper and last time i failed section 2. I was just wondering if anyone had any "idiots" guide to the ratios?? I get stuck with the RONA and ROCE besides all the others!!
Would be really grateful if anyone could help!! (PLEASE)!!
I am resiting this paper and last time i failed section 2. I was just wondering if anyone had any "idiots" guide to the ratios?? I get stuck with the RONA and ROCE besides all the others!!
Would be really grateful if anyone could help!! (PLEASE)!!
0
Comments

RONA=
Profit from operations / Net Assets x 100
ROCE=
Profit from opersations / Capital Employed x 100
The answer is really in the letters, ROCE = Capital Employed (or just Capital)
RONA is on Net Assets.
You only need to remember the Profit from Operations bit really :)0 
Oh, and in those exams it's 'Net Profit', not 'Profit from Operations'
Sorry, I'm doing DFS, so it's had a name change!0 
Do you think it would help you if I did a class on ratios (say an hour) and it was broadcast to your computer?Sandy
sandy@sandyhood.com
www.sandyhood.com0 
I know what you mean about ratios, I am still stuck on a few myself. One I am definitely struggling to understand is the Gearing Ratio, I have searched posts and can see its debt/ debt + equity or debt/ equity from previous threads but I am finding it hard to relate without anything work work by. For example in the PEV June 2007 exam, Q2.1 viii) it asks for gearing.
Is the debt the longterm borrowing figure? And this may seem like a ridiculous question but what part is the equity figure? I have tried to jumble some figures around to see what makes up the answer but I haven't had much success. If anyone could point me in the right direction as to what figures each ones mean it would be appreciated. Thanks.0 
Me too!0

Please Sandy, me too!0

And me too please0

I am definitely struggling to understand is the Gearing Ratio, I have searched posts and can see its debt/ debt + equity or debt/ equity
Rather than worry about more than one ratio, I recommend (and only teach PEV students) one formula debt/ debt + equityIs the debt the longterm borrowing figure?
Not quite answering the: what part is the equity figure? question
[size=+2]But debt + equity is the same as total assets  current liabilities (or fixed assets + net current assets)[/size]
So often PEV papers don't have full balance sheet  instead a list of assets and liabilities
if they do you can find the gearing by calculating
longterm borrowings
total assets less current liabilitiesSandy
sandy@sandyhood.com
www.sandyhood.com0 
Thats great, thanks Sandy! Its not covered in my textbook and just couldn't grasp the specifics of it. Thats much easier to understand I'll work on remembering that now I know which figures to focus on. Thank you0

Link if you'd like to attend the webinar
Ratio analysis and the interpretation of performance indicators
Date/time of webinar: 15.00 on Friday 27 November 2009
Presenter: Sandy Hood
Duration: 60 mins
Click through the link to find out how to register.Sandy
sandy@sandyhood.com
www.sandyhood.com0 
I'm glad I have that day off work for study leave so will be able to be there, I have registered my interest to the email address  thanks.0

Thank you Sandy  I too have registered0
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