Important Ratios Flashcards
1
Q
Receivables turnover
A
Revenue ÷ Average accounts receivable
2
Q
Days sales outstanding (DSO)
A
Days in period ÷ Receivables turnover
3
Q
Inventory turnover
A
COGS ÷ Average inventory
4
Q
A/P turnover
A
COGS ÷ Average AP
5
Q
Payables payment period (PPP)
A
Days in period ÷ AP turnover
6
Q
Current
ratio
A
Current assets ÷ Current liabilities
7
Q
Quick ratio
(acid test)
A
Cash and AR ÷ current liabilities
8
Q
Gross profit margin
A
Gross profit ÷ Revenue
9
Q
Operating margin
A
Operating profit ÷ Revenue
10
Q
Net profit margin
A
Net income ÷ Revenue
11
Q
Asset turnover
A
Revenue ÷ Average assets
12
Q
Return on assets (ROA)
A
Net income ÷ Average assets
13
Q
Return on equity (ROE)
A
Net income ÷ Total equity
14
Q
Basic EPS
A
Net income less preferred dividends ÷ Weighted avg. shares out.
15
Q
Diluted EPS
A
Diluted net income ÷ Weighted avg. diluted shares out.
