Accounting Ratios Flashcards
State all the types of accounting ratios.
1) Liquidity Ratio
2) Solvency Ratio
3) Turnover Ratio
4) Profitability Ratio
State all the liquidity ratios.
Current Ratio and Quick Ratio
State all the solvency ratios.
Debt to Equity Ratio
Total Assets to Debt Ratio
Proprietary Ratio
Interest Coverage Ratio
State all Activity/Turnover ratios.
Inventory Turnover Ratio
Trade Receivable Ratio
Trade Payable Ratio
Working Capital Turnover
State all the Profitability ratios
Gross Profit Ratio Operating Ratio Operating Profit Ratio Net profit Ratio Return on Capital Employed
Current Ratio
Current Assets/Current Liabilities=x:1
Quick Ratio
Quick Assets/Current Liabilities=x:1
Debt to Equity Ratio
Debt/Equity=x:1
Total Assets to Debt
Total Assets/ Debt=x:1
Proprietary Ratio
Equity/Total Assets=x:1
Interest Coverage Ratio
Profit before interest and tax/ Interest on Debt=x times
Inventory Turnover Ratio
Cost of Goods Sold/Average Inventory=x times
Trade Receivable Ratio
Credit Net Sales/Average Trade Receivable=x times
Trade Payable Ratio
Net Credit Purchases/Average Trade Payables=x times
Working Capital Turnover
Net Sales/Working Capital=x times
Gross Profit Ratio
Gross Profit/Net Sales*100=x%
Operating Ratio
Cost of Goods Sold + Operating Expenses/ Net Sales*100=x%
Operating Profit Ratio
Operating Profit/Net Sales*100=x%
Net Profit Ratio
Net profit after tax/net sales*100=x%
Return on Capital Employed
Profit Before Interest and tax/capital employed*100=x%
