Ratios

Question 1

Current ratio

Answer 1

(Current Asset)/(Current Liabilities)

Question 2

Quick ratio

Answer 2

(Current Assets−Inventories)/(Current Liabilities)

Question 3

Cash ratio

Answer 3

(CashMarketable securities)/(Current liabilities)

Question 4

Debt to asset ratio

Answer 4

(Total debt)/(Total assets)

Question 5

Debt to equity ratio

Answer 5

(Total debt)/(Total Equity)

Question 6

Interest coverage

Answer 6

EBIT/(Interest Expense)

Question 7

Gross profit margin

Answer 7

(Gross profit)/Revenue

Question 8

Operating profit margin

Answer 8

(Operating income)/Revenue

Question 9

Net profit margin

Answer 9

(Net income)/Revenue

Question 10

Return on asset (ROA)

Answer 10

(Net income)/(Total asset)

Question 11

Return on equity (ROE)

Answer 11

(Net income)/Equity

Question 12

Asset turnover

Answer 12

Revenue/(Total assets)

Question 13

Inventory turnover

Answer 13

COGS/(Average Inventory)

Question 14

Receivables turnover

Answer 14

Revenue/(Average accounts receivable)

Question 15

EPS

Answer 15

(Net income−Preferred dividends)/(Weighted Average shares outstanding)

Question 16

P/E

Answer 16

(Market price per share)/EPS

Question 17

Dividend Yield

Answer 17

(Annual dividends per share)/(Market price per share)

Question 18

Working capital turnover

Answer 18

Revenue/(Average working capital)

Question 19

Fixed asset turnover

Answer 19

Revenue/(Average Net Fixed Assets)

Question 20

DSO

Answer 20

(Number of Days in Period)/(Receivables Turnover)

Question 21

Cash conversion cycle

Answer 21

DSO+Days inventory held−Number of days payables

Question 22

Debt to capital

Answer 22

(Total debt)/(Total debt+Equity)

Question 23

Fixed charged coverage

Answer 23

(EBIT+Lease payments)/(Interest payments+Lease payments)

Question 24

Effective tax rate

Answer 24

(Tax expense)/(Earnings before tax)

Question 25

Financial leverage

Answer 25

Debt/Equity