Ratios Flashcards
Current Ratio
Measures a company’s ability to pay its current debts
Quick Ratio
Measures a company’s ability to pay its debts within a short period of time
Equity Ratio
Show the % of assets that have actually been paid for
Debt Ratio
Show the % of assets that have not yet been paid paid for
Rate of Return on Net Sales
Measures the proportion/percentage of revenue kept/earned as net income
Rate of Return on O/E
Measures what percentage the owner is earning on his/her investment in the business
Gross Profit %
Measures the proportion/percentage of revenue earned as gross profit
Mark-Up %
Shows the % that has been added to the original cost of merchandise to determine the selling price
A/R Turnover
Measures how many days’ sales are represented by the A/R and ∴ how long it takes for customers to pay for goods/services
