#32 Ratios - Liquidity/Solvency Flashcards
1
Q
Accounts receivable turnover =
A
net credit sales / average accounts receivable
2
Q
Inventory turnover =
A
cost of goods sold / average inventory
3
Q
Average days to collect AR =
A
365 / Accounts receivable turnover
4
Q
Times interest earned =
A
income before interest expense / interest expense
5
Q
What is the operating cycle?
A
The total period of time from the purchase of inventory until the collection of cash from receivables
6
Q
Asset Turnover =
A
net sales / average total assets
7
Q
What is the defense interval ratio?
A
quick assets / average daily cash expenditures
