FORMULA Flashcards by Franchesca Shane Sentino | Brainscape

Q

GROSS PROFIT MARGIN

A

Gross profit ÷ Net sales

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Q

OPERATING INCOME MARGIN

A

Operating Income ÷ Net sales

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Q

NET PROFIT MARGIN

A

Net income ÷ Net Sales

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Q

RETURN ON ASSETS

A

Net Income ÷ Average Assets

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Q

RETURN ON EQUITY

A

Net Income ÷ Average Equity

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Q

ASSET TURNOVER

A

Net Sales ÷ Average Sales

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Q

FIXED ASSET TURNOVER

A

Net Sales ÷ Average Fixed Asset

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Q

INVENTORY TURNOVER

A

Cost of Good Sold ÷ Average Inventory

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Q

DAYS IN INVENTORY

A

365÷Inventory Turnover

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Q

ACCOUNTS RECEIVABLE TURNOVER

A

Net Sales ÷ Average Accounts Receivable

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Q

DAYS IN ACCOUNTS RECEIVABLE

A

365÷Accounts Receivable Turnover

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Q

(SOLVENCY MEASURES)
DEBT TO EQUITY RATIO

A

Total debt ÷ Equity

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Q

(SOLVENCY MEASURES)
DEBT RATIO

A

Total Debt ÷ Total Assets

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Q

(SOLVENCY MEASURES)
EQUITY RATIO

A

Total Equity ÷ Total Assets

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Q

(SOLVENCY MEASURES)
INTEREST COVERAGE RATIO

A

Operating Income ÷ Interest Expense

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Q

(LIQUIDITY)
CURRENT RATIO

A

Current Assets ÷ Current Liabilities

Q

(LIQUIDITY)
QUICK RATIO

A

Quick Assets ÷ Current Liabilities