AIC - Ratios Flashcards
Current Ratio
current assets /current liabilities
2.5 times
Quick Assets or Acid test
current assets - inventory - prepaid expenses
/current liabilities
1.0 times
Leverage: Debt to total assets - high
total liabilities/total assets
33 percent
Times interest earned - low
operating earnings/interest expenses
8.0 times
Fixed charge coverage
income available for meeting fixed charges/fixed
charges
5.5 times
Activity: Inventory turnover
sales/inventory
9 times
Average collection period
receivables/sales per day
20 days
Fixed assets turnover
sales/fixed assets
5.0 times
Total assets turnover
sales/total assets
2 times
Profitability: Return on Sales
net income after taxes/sales
5 percent
Return on total assets
net income after taxes/total assets
8 percent
Return on Equity
net income after taxes/Owners Equity
15 percent
Break even
G&A Overhead/Gross Profit Percent
20 percent
Days of Cash
(Cash & Cash Equivalents) x 360/Revenue
Working Capital
Current Assets - Current Liabilities
