DFS ratio's

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi does anyone have any hints/tip to help remember the ratios for section 2 of the exam

thanks in advance

Lyn

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS ratio's

    Not really, the only acronym I could even remotely come up with when I did it was for the "xxx in days" ratios; ICPPRR

    Inventories/Cost of sales x 365 days

    Receivables/Revenue x 365 days

    Payables/Purchases x 365 days

    The rest I unfortunately had to learn off by heart since any can come up though they do often seem to like the ROCE ratio! Please see Sandy Hoods explanation on another thread for this;

    http://forums.aat.org.uk/forums/posts/list/15678.page

    Robert
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS ratio's

    I've a quick question too about ratios.

    When calculating ROCE, for the capital employed you use Net Assets + Long Term Liabilities - am I correct?

    Then calculating Asset Turnover do you use the same figure for capital employed or is it just the Net Asset figure?

    I was further confused about Gearing - the text book definition said Long Term Debt + Pref shares / Net Assets + LTD + pref shares. but in a past paper they just used Net Assets.

    Feeling a bit all at sea over the ratios - and regurgitating all those IASs :(
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:DFS ratio's

    I sat DFS last December and we spent ages going over and learning the IAS's, we never got asked to name one of them, we were told what 1 was and had to give an answer relating too it!

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