explain the relationship of gross profit and profit for the year to the valuation of inventory, rate of inventory turnover, revenue, expenses, and equity

understand, calculate and explain the importance of the following accounting ratios: Gross margin, Profit margin, Return on capital employed (ROCE), Current ratio, Liquid (acid test) ratio, Rate of inventory turnover (times), Trade receivables turnover (days), Trade payables turnover (days)

recognise the importance of valuation of inventory and the effect of an incorrect valuation of inventory on gross profit, profit for the year, equity and asset valuation