Financial Ratios Flashcards
Current ratio
Current assets/Current liabilities
Quick or acid-test ratio
(Cash + short-term investments + net receivables) / Current liabilities
Current cash debt coverage
Net cash provided by operating activities / Average current liabilities
Accounts receivable turnover
Net sales / Average trade receivables (net)
Inventory turnover
Cost of goods sold / Average inventory
Asset turnover
Net sales / Average total assets
Profit margin on sales
Net income / Net sales
Return on assets
Net income / Average total assets
Return on common stock equity
Net income minus preferred dividends / Average common stockholders’ equity
Earnings per share
Net income minus preferred dividends / Weighted-average number of shares outstanding
Payout ratio
Cash dividends / Net income
Debt to assets ratio
Total liabilities / Total assets
Times interest earned
Income before income taxes and interest expense / Interest expense
Cash debt coverage
Net cash provided by operating activities / Average total liabilities
Book value per share
Common stockholders’ equity / Outstanding shares
