Equations

Question 1

Networking capital

Answer 1

Current assets - current liabilities

Question 2

Current ratio

Answer 2

Current assets/current liabilities

Question 3

Quick ratio

Answer 3

Quick assets/current liabilities

Question 4

Quick assets

Answer 4

Cash + net current receivables + short-term investments

Question 5

Debt ratio

Answer 5

Total liabilities/total assets

Question 6

Interest coverage ratio

Answer 6

EBIT/interest expense

Question 7

Accounts receivable turnover

Answer 7

Net credit sales/average net accounts receivable

Question 8

Inventory turnover

Answer 8

COGS/Average inventory

Question 9

Return on assets

Answer 9

Net income/Average total assets

Question 10

Earnings per share

Answer 10

Net income/average # of common shares outstanding

Question 11

Dividends per share

Answer 11

Dividends/ average # of common shares outstanding

Question 12

Dividend yield

Answer 12

Dividends per share/ current market price per share of stock

Question 13

Price-earnings ratio

Answer 13

Current price per share/ current Earnings per share

Question 14

Return on equity

Answer 14

Net income/average stockholder’s equity