Financial Ratios Flashcards
1
Q
Current Ratio
A
Current Assets / Current Liabilities
- Liquidity Ratio
2
Q
Quick Ratio
A
(Current Assets - Inventory) / Current Liabilities
- Liquidity Ratio
3
Q
Return on Assets
A
Net Income / Total Assets
- Profitability Ratio
4
Q
Return on Equity
A
Net Income / Shareholders’ Equity
- Profitability Ratio
5
Q
Gross Profit Margin
A
(Sales - COGS) / Sales
- Profitability Ratio
6
Q
Debt Ratio
A
Liabilities / Assets
- Financial Leverage Ratio
7
Q
Debt to Equity Ratio
A
Liabilities / Owners’ Equity
- Financial Leverage Ratio
8
Q
Inventory Turnover
A
COGS / Average Inventory
- Asset Turnover Ratio
9
Q
Average Inventory
A
(Beginning Inventory + Ending Inventory) / 2
- Asset Turnover Ratio
10
Q
Inventory Period
A
365 / Inventory Turnover
- Asset Turnover Ratio
11
Q
Receivables Turnover
A
Credit Sales / Avg. Accounts Receivable
- Asset Turnover Ratio
12
Q
Average Collection Period
A
365 / Receivables Turnover
- Asset Turnover Ratio
