Ratios Flashcards
Return on Equity(ROE)
Net profit after taxes/Shareholders equity ; higher
Return on Investment(ROI)
Net profit after taxes/Total Assets ;higher
Net Profit Margin
Net profit after taxes/sales; higher
Total Asset Turnover
sales/total assets ; higher
Inventory Turnover
Cost of good sold/Inventory ; higher
Interest Coverage
EBIT/ Interest Expense ; higher
Debt to Total Assets
total debt/total assets ; lower -
Acid Test
Current assets less inventories/ current liabilities ; higher ; greater than or equal to 1
Current
Current assets/current liabilities ; higher ; greater than or equal 2, ok if greater or equal than 1.5
debt to equity
Total debt/total equuity ; lower
debt to total assets- aka
debt ratio
Interest Coverage aka
Times interest earned
net profit margin aka
return on sales
total asset turnover aka
capital turnover
return on investment aka
return on assets
