FAR 5 Current Ratio Flashcards
What is the current Ratio?
Current assets / current liabilities
Whats the average days sales in inventory formula? How do you get the inventory turnover
365/ inventory turnover
Turnover formula is COGS / average inventory
What is the dividend payout formula?
Cash dividends / Net income
Measures % of earnings distributed in the form of cash dividends
What is the receivable turnover ratio?
Net sales / Average AR
MEASURES HOW EFFICIENTLY A COMPANY COLLECTS ITS AR
What is the price-to-earnings ratio
price per share / EPS
What is the asset turnover formula?
Net sales / avg total assets
How do you find the average number of days to collect AR?
Take the credit sales and divide by 365 and then divide AVERAGE ar by days
What is the times interest ratio
Operating income / interest expense
What is the inventory turnover formula?
COGS / AVG INVENTORY
What formula is equity divided by the number of shares outstanding?
Book value per share
Measures the amount of common stockholders’ equity in each share of stock
What is the return on assets formula?
Net income / avg assets
What is the debt-to-equity formula?
Total Debt (liabilities current and LT) / Total equity
What is the return on Sales formula?
Net Operating Profit / Sales
