Financial Ratios Flashcards
Current ratio
current assets/current liabilities
Acid-test ratio
(Current Assets - Inventory) / Current Liabilities (liquidity)
Accounts receivable turnover
Net Sales / Average Accounts Receivable
Inventory turnover
cost of goods sold/average inventory
Days’ sales uncollected
(accounts receivable/net sales) x 365
Days’ sales in inventory
(Average Inventory / Cost of Goods Sold) x 365 days
Total asset turnover
net sales/average total assets
Debt ratio
total liabilities/total assets
Equity ratio
total equity/total assets
Debt-to-equity ratio
total liabilities/total equity
Times interest earned
(net income + interest expense + income tax expense)/interest expense
Profit margin ratio
net income/net sales
Gross margin ratio
(Net Sales - Cost of Goods Sold) / Net Sales
Return on total assets (ROA)
net income/average total assets
Return on equity
Net Income/Avg Total Equity
