Ratio and Variance Analysis Flashcards
Inventory Turnover Ratio
Cost of Goods Sold / Avg Inventory
What is the formula to calculate COGS?
COGS = Beg Inv + Purchases - End Inv
Debt to Equity Ratio
Total Liabilities / Equity
Net Profit Margin Ratio
Net Income / Net Sales
Return on Assets Ratio
Net Income / Avg Total Assets
Return on Equity Ratio
Net Income - Preferred Dividends / Avg Common Equity
Return on Equity Ratio
Net Income - Preferred Dividends / Avg Common Equity
Current Ratio
Current Assets / Current Liabilities
Quick Ratio
Quick Assets (including Cash, Marketable Securities, Accounts Receivable, less allowance for doubtful accounts) / Current Liabilities
Days in Accounts Receivable Ratio
Ending Accounts Receivable, Net / (Sales, Net) / 365)
Accounts Receivable Turnover Ratio
Net Sales / Avg Net Receivables
Days In Inventory Ratio
Ending Inventory / (COGS / 365)
Inventory Turnover Ratio
Cost of Goods Sold / Avg Inventory
Avg inventory is calculated using the avg between Beg and Ending Inv.
Note in order for Inventory Ratio to increase, COGS must increase or Avg Inv must decrease.
Debt to Equity Ratio
Total Liabilities / Total Equity
Total Debt Ratio
Total Liabilities / Total Assets
Times Interest Earned Ratio
Net Income (earnings) before Interest Exp and Taxes / Interest Exp
