RATIOS Flashcards

1
Q

Liquidity Ratio

CURRENT RATIO

A

Current assets/Current liabilities

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2
Q

Liquidity Ratio

QUICK RATIO

A

(Cash + Cash equivalents + Net receivables)/ Current liabilities

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3
Q

Liquidity Ratio

CURRENT DEBT-TO-ASSETS RATIO

A

Current liabilities/Total assets

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4
Q

Activity Ratio

ACCOUNTS RECEIVABLE TUNROVER

A

Net sales/Accounts receivable (Ave.)

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5
Q

Activity Ratio

DAY’S SALES IN ACCOUNTS RECEIVABLE

A

365/Accounts receivable turnover

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6
Q

Activity Ratio

AVERAGE COLLECTION PERIOD

A

Accounts receivable/Ave. sales per day

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7
Q

Acitivity Ratio

AVERAGE PAYMENT PERIOD

A

Accounts payable/Ave. purchases per day

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8
Q

Activity Ratio

TOTAL ASSET TURNOVER

A

Sales/Total assets

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9
Q

Activity Ratio

INVENTORY TURNOVER

A

Cost of sales/Ending inventory (Ave.)

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10
Q

Activity Ratio

DAYS’ SALES IN INVENTORY

Age of Inventory

A

365/Inventory Turnover

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11
Q

Debt Ratio

DEBT RATIO

Liabilities to Assets

A

Total liabilities/Total assets

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12
Q

Debt Ratio

DEBT-TO-EQUITY RATIO

A

Total liabilities/Stockholders’ equity

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13
Q

Debt Ratio

TIMES INTEREST EARNED

A

Earnings before interest and taxes/Interest

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14
Q

Profitability Ratios

GROSS PROFIT MARGIN

A

Gross profit/Sales

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15
Q

Profitability Ratio

OPERATING PROFIT MARGIN

A

Operating profit/Sales

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16
Q

Profitability Ratio

NET PROFIT MARGIN

A

Net profit/Sales

17
Q

Profitability Ratio

RETURN ON TOTAL ASSETS

A

Net income/Total assets

(Net income + Interest expense)/Ave. total assets

18
Q

Profitability Ratio

RETURN ON EQUITY

A

Net income/Stockholders’ equity

19
Q

Capital Turnover Ratio

ASSET LIQUIDITY

A

Current assets/Total assets

20
Q

Capital Turnover Ratio

SALES TO ASSETS

A

Net sales/Total assets

21
Q

Capital Turnover Ratio

NET WORTH TO SALES

A

Stockholders’ equity/Net sales

22
Q

QUALITY OF EARNINGS RATIO

A

Cash from operations/Net income

23
Q

CASH RATIO

A

Cash/Current liabilities