RATIOS Flashcards
Liquidity Ratio
CURRENT RATIO
Current assets/Current liabilities
Liquidity Ratio
QUICK RATIO
(Cash + Cash equivalents + Net receivables)/ Current liabilities
Liquidity Ratio
CURRENT DEBT-TO-ASSETS RATIO
Current liabilities/Total assets
Activity Ratio
ACCOUNTS RECEIVABLE TUNROVER
Net sales/Accounts receivable (Ave.)
Activity Ratio
DAY’S SALES IN ACCOUNTS RECEIVABLE
365/Accounts receivable turnover
Activity Ratio
AVERAGE COLLECTION PERIOD
Accounts receivable/Ave. sales per day
Acitivity Ratio
AVERAGE PAYMENT PERIOD
Accounts payable/Ave. purchases per day
Activity Ratio
TOTAL ASSET TURNOVER
Sales/Total assets
Activity Ratio
INVENTORY TURNOVER
Cost of sales/Ending inventory (Ave.)
Activity Ratio
DAYS’ SALES IN INVENTORY
Age of Inventory
365/Inventory Turnover
Debt Ratio
DEBT RATIO
Liabilities to Assets
Total liabilities/Total assets
Debt Ratio
DEBT-TO-EQUITY RATIO
Total liabilities/Stockholders’ equity
Debt Ratio
TIMES INTEREST EARNED
Earnings before interest and taxes/Interest
Profitability Ratios
GROSS PROFIT MARGIN
Gross profit/Sales
Profitability Ratio
OPERATING PROFIT MARGIN
Operating profit/Sales
Profitability Ratio
NET PROFIT MARGIN
Net profit/Sales
Profitability Ratio
RETURN ON TOTAL ASSETS
Net income/Total assets
(Net income + Interest expense)/Ave. total assets
Profitability Ratio
RETURN ON EQUITY
Net income/Stockholders’ equity
Capital Turnover Ratio
ASSET LIQUIDITY
Current assets/Total assets
Capital Turnover Ratio
SALES TO ASSETS
Net sales/Total assets
Capital Turnover Ratio
NET WORTH TO SALES
Stockholders’ equity/Net sales
QUALITY OF EARNINGS RATIO
Cash from operations/Net income
CASH RATIO
Cash/Current liabilities
