Financial Ratios

This resource will take approximately two lessons to complete. It covers the topic area 3.7.2 - Analysing the existing internal position of a business to assess strengths and weaknesses: financial ratio analysis. It includes all the different financial ratios required for the Business A level exam for the AQA exam board as well as reflecting back on income statements and balance sheets. Some of these ratios will also be relevant to other exam boards, with it being targeted towards KS5 but can also be adapted to KS4 Business Studies. The financial ratios include;

• Current Ratio
• Acid Test
• Gearing
• Gross Profit margin
• Net Profit margin
• ROCE
• Debtor days
• Creditor days
• Stock turnover
  This resource also includes a worksheet where students have to calculate the missing figures from an income statement and a balance sheet, which can then be used to calculate the different financial ratios named above. It provides students with the opportunity to compare from previous years and analyse the reasons for why these figures may have changed and how they can be improved.