Accounting Equations

Question 1

Current Ratio

Answer 1

CURRENT Assets / CURRENT Liabilities

Question 2

Acid-Test (Quick) Ratio

Answer 2

Cash + Short Term Inv + Receivables (net) / Current Liabilities

Question 3

Receivables Turnover

Answer 3

Net credit Sales / Average Net Receivables

Question 4

Inventory Turnover

Answer 4

Cost of Goods Sold / Average Inventory

Question 5

Profit Margin

Answer 5

Net Income / Net Sales

Question 6

Asset Turnover

Answer 6

Net Sales / Average Assets

Question 7

Return on Assets

Answer 7

Net Income / Average Assets

Question 8

ROSE (Return on Stockholder Equity)

Answer 8

Net Income - Preferred Div. / Avg. Common Shares Outstanding

Question 9

EPS (Earnings Per Share)

Answer 9

Net Inc - Pref Div. / WEIGHTED Avg Common Shares Outstanding

Question 10

P-E Price-Earnings Ratio

Answer 10

Market Price Per Share / Earnings Per Share

Question 11

Payout Ratio

Answer 11

Cash Dividends / Net Income

Question 12

Debt to Total Assets Ratio

Answer 12

Total Debt / Total Assets

Question 13

Times Interest Earned (TIE)

Answer 13

Income before Tax + Int / Int