Ratio Analysis Flashcards
1
Q
What is gross margin?
A
Revenue - COGS
2
Q
What is contribution margin?
A
Revenue - Variable cost (focus on cost behavior)
3
Q
Formula for operating profit margin?
A
Operating income /sales
4
Q
What is profit margin?
A
Net income / Net sales
5
Q
What is ROI and ROE?
A
ROI = Net income / Total Assets
ROE= Net income / Common stockholder Equity
Dupont Approach to ROI:
(Net income / sales) X (Sales/Total Assets)
6
Q
What is the receivable turnover?
A
Sales / Average Receivable balance
Days in receivables
Average AR/Average sales per day
7
Q
What is the inventory turnover?
A
COGS/Average Inventory
8
Q
Fixed asset turnover?
A
Sales/Average Fixed asset
9
Q
What is the current ratio and quick ratio?
A
current asset/current liabilities
Quick: (Current Assets - Inventory) / Current Liabilities
