AccountingCode 9706
Analysis and communication of accounting information
What this topic asks you to be able to do
- the way to work out each of these ratios: the length of the working capital cycle, counted in days; the ratio of net working assets to revenue, or sales; interest cover; the gearing ratio; earnings per share; the price/earnings ratio; dividend per share; dividend yield; dividend cover
- the method for analysing and evaluating what the outcomes of the ratios show, and then drawing conclusions from them
- the way to produce suitable recommendations for stakeholders, based on the analysis carried out
- the interrelationships between ratios
- use what you understand about how ratios are calculated and evaluated to reach well-informed business decisions from relevant information