14220147
Description
Flashcards by Carley O'Connor, updated more than 1 year ago
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Created by Carley O'Connor
over 6 years ago
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| Question | Answer |
| (Short-term Measures) Return on Capital Employed (ROCE) Also: Return on Net Assets (RONA) | ROCE= profit before interest & tax ------------------------------ x 100% average capital employed (gives an indication as to how well a biz uses its capital to generate profits) RONA= operating profit (before interest & tax) ---------------------------------- x 100% total assets - current liabilites |
| (Short-term Measures) Earnings Per Share (EPS) | Determines the profit available to ordinary shareholders, expressed per share. Only gives the earning per share might expect to receive. EPS= profits after interest, tax & preference share dividends ---------------------------------------------------- # of ordinary shares issued |
| Price Elasticity of Demand (PED) | Percentage change in quantity demanded ---------------------------------------------------------- Percentage change in price Concept explains the relationship between changes in quantity demanded and changes in price. Can be applied at on point or over part (arc) |
| PED Calculation: non-average arc method average arc method | measures: % change in quantity demanded ------------------------------ % change in price (non-ave=using the starting point of price and quantity as the basis of % calculation ave=using the average price and quantity as the basis for the % calculation) |
| Price Elasticity of Supply (PES) | % change in quantity supplied --------------------------------------------- % change in price Is a measurement of the responsiveness of supply of a good to a change in its price. Always has a positive value. |
| PES Calculation: non-average arc method average arc method | % change in quantity supplied --------------------------------------------- % change in price (non-ave=using the starting point of price and quantity as the basis of % calculation ave=using the average price and quantity as the basis for the % calculation) |
| Multiplier equation | K = 1/ (1-MPC) MPC is marginal propensity to consume or K = 1/MPS MPS is the marginal propensity to save |
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