Financial Analysis Ratios Flashcards
Financial ratios
Relationships determined from a firm’s financial information and used for comparison purposes
Current ratio
Current assets / current liabilities
Quick ratio
(Current assets - inventories) / current liabilities
Inventory turnover
Sales / inventories
Fixed assets turnover
Sales / net fixed assets
Total assets turnover
Sales / total assets
DSO (days sales outstanding) AR
Account receivables / (annual sales/360)
DSO (days sales outstanding) AP
Accounts payable / (annual sales/360)
ROA (return on total assets)
Net income / total assets
ROE (return on equity) %
(Net income / common equity ) * 100
Profit margin
Net income / sales
There are ____ types of financial ratios
4
Types of financial ratios
- Liquidity ratios
- Asset management ratios
- Debt management ratios
- Profitability ratios
The Liquidity ratios are
Current Ratio
Quick Ratio
The Asset management ratios are:
Inventory turnover
Fixed assets turnover
Total assets turnover
