Financial Ratios Flashcards
Asset Turnover Ratio
Net Sales / Average total assets
Profit Margin Ratio
Net income / total sales
Rate of return on assets
(Net income/ net sales) X (net sales / average total assets) OR
Net income / average total assets OR
profit margin X asset turnover
Current ratio
Current assets / current liabilities
Time interest earned
(net income + income expense + interest expense) / interest expense
interest expense
CV X effective rate
net cash flow
operating activities / current liabilities
acid test ratio
(cash + short term investments + net receivables) / current liabilities
rate of return on common stock equity
(net income - preferred dividends) / average common stockholders equity
payout ratio
cash dividends / (net income - preferred dividends)
book value per share
common stockholders’ equity / outstanding shares
debt to asset ratio
total liabilities / total assets
earnings per share
(net income - preferred dividends) / weighted average common stock outstanding
depletion cost per unit
(total cost - salvage) / estimated units available
