exam 2 - ch 4, 6, and 7 Flashcards
1
Q
current ratio =
A
current assets / current liabilities
2
Q
quick ratio(acid test) =
A
(cash + AR) / current liabilities
3
Q
days in recevables(average collection period) =
A
AR / daily credit sales = AR / (annual credit sales / 365)
4
Q
accounts receivable turnover =
A
annual credit sales / AR
5
Q
days in inventory =
A
inventory / daily COGS = inventory / (annual COGS / 365)
6
Q
inventory turnover =
A
COGS / inventory
7
Q
operating return on assets(OROA)
A
indicates the level of operating profits relative to the firms total assets
