Formulas de Ratios

Question 1

1.-Profit Margin=

Answer 1

Net income/sales%

Question 2

2.-Return on assets (investment)(A)=

Answer 2

Net income /Total assets%

Question 3

2.-Return on assets (investment)(B)=

Answer 3

(Net income/sales) * (Sales/Total assets)%

Question 4

3.-Return on equity (A)=

Answer 4

Net income/stockholders equity%

Question 5

3.-Return on equity (B)=

Answer 5

Return on assets(investment)/(1-Debt/assets)%

Question 6

4.-Receivables turnover=

Answer 6

sales(credit)/Receivables

Question 7

5.-Average collection period=

Answer 7

Accounts receivable/Average daily credit sales

Question 8

6.-Inventory turnover=

Answer 8

Sales/inventory

Question 9

7.-Fixed asset turnover=

Answer 9

Sales/total assets

Question 10

9.-Current ratio=

Answer 10

current assets/current liabilities

Question 11

10.-Quick ratio=

Answer 11

Current assets-inventory/current liabilities

Question 12

11.-Debt to total assets=

Answer 12

Total debt/Total assets%

Question 13

12.-Times interest earned=

Answer 13

Income before interest and taxes/fixed charges

Question 14

Fixed charge coverage=

Answer 14

Income before fixed charges and taxes/fixed charges