Help with dfs, um stressed

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CAPTAIN
CAPTAIN Registered Posts: 6 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Hi guys ccan someone pliz answer me on this one! Section one of DFS everything balanced but i had a problem with 2.1 Gearing ratio I used the formular

Debt divided by equity x 100

So I took the long term loan and divided it by equity, i showed my workings for all ratios, Is it okay, ,

I failed to define current assets and liabilities rather i defined assets and libilities,:

Another problem was Net profit ratio, I used the formular

Net Profit divided by turnover x 100, but in the book the say Operating profit divided by turnover x 100, pliz guys help how do they mark our papers will I pass,

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  • Welshdragon
    Welshdragon Registered Posts: 9 New contributor 🐸
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    Hi think gearing ratio is debt over capital employed (equity and non curr liabilities) x 100.

    The net profit ration -is I think operating profit over revenue yes, but this is net profit.

    Section 2 I was not sure about myself just hoping my waffle was enough!!!
    Tracey
  • Ampsie
    Ampsie Registered Posts: 145 Dedicated contributor 🦉
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    Hi Captain,

    There are two ways you can calculate gearing:

    debt / capital employed
    debt / equity

    so you were quite right.

    As for the net profit you should be ok as long as you showed the formula that you used to calculate it.

    Don't worry - i am panicking too! I stupidly included current liabilities in the debt for the gearing ratio and i did exactly the same as you and gave the definitions of assets and liabilities instead of current ones.

    I did so well on section 1 and i'm just keeping my fingers crossed that those two mistakes on section 2 won't cost me the whole exam!

    Shame we have to wait so long to find out!

    Ampsie
    :001_smile:

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