Financial Ratios Flashcards
(21 cards)
current ratio
current assets / current liabilities
quick ratio
(current assets - inventories) / current liabilities
working capital
current assets - current liabilities
inventory turnover
COGS / avg. inventory
COGS
cost of goods sold
days to sell inventory
365 / inventory turnover
accounts receivable turnover
sales (credit) / avg. accounts receivable
receivable collection period
365 / accounts receivable turnover
profit margin
gross profit / sales
operating profit margin
operating income / revenue
EAT
earnings after tax
return on assets (ROA)
EAT / total assets
return on equity (ROE)
EAT / equity
debt to equity
total long-term debt / equity
EBIT
earnings before interest and tax
times interest earned
EBIT / interest expense
debt ratio
total debt / total assets
Liquidity ratios
Used to determine the ability to meet short-term obligations
Activity ratios
Used to determine the relative efficiency of financial management
Profitability ratios
Used to measure relative profitability
Debt ratios
Used to determine the ability to meet long-term obligations
