Financial Ratios Flashcards
1
Q
What are the six financial ratios?
A
- Current Ratio
- Inventory Holding Period
- Payables Holding Period
- Receivables Holding Period
- Gross Profit Margin
- Net Profit Margin
2
Q
How do you calculate current ratio?
A
Current Assets / Current Liabilities
3
Q
How do you calculate the inventory holding period?
A
(Inventory / Cost of Goods Sold) x 365
4
Q
How do you calculate the payables holding period?
A
(Payables / Cost of Goods Sold) x 365
5
Q
How do you calculate the receivables holding period?
A
(Receivables / Sales) x 365
6
Q
How do you calculate the gross profit margin?
A
(Gross Profit / Sales) x 100
7
Q
How do you calculate the net profit margin?
A
(Net Profit / Sales) x 100
