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Accounting > Ratios > Flashcards

Ratios Flashcards

1
Q

Gross profit ratio

A

Gross profit / net sales

Percentage

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2
Q

Net profit ratio

A

Net profit / net sales

Percentage

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3
Q

Rate of return on equity ratio

A

Net profit / Average Owner’s Equity

Percentage

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4
Q

Rate of return on total assets ratio

A

Net profit + interest expense / Average total assets

Percentage

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5
Q

Rate of turnover of inventories

A

Cost of goods sold / average inventories

times per year

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6
Q

Rate of turnover of accounts receivable

A

Average accounts receivable / Net credit sales x 365

days

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7
Q

Current ratio

A

Current assets / current liabilities

Ratio, decimal

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8
Q

Quick ratio

A

current assets - (inventories + prepayments) / current liabilities
Ratio, decimal

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9
Q

Debt ratio

A

Total liabilities / total assets

Percentage

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10
Q

Equity ratio

A

Total Owner’s equity / total assets

Percentage

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11
Q

Gross profit, net profit, rate of return on owner’s equity and rate of return on total assets ratios are what?

A

Profitability ratios

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12
Q

Rate of turnover of inventories and rate of return of accounts receivable are???

A

Effectiveness of management policies

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13
Q

Current, quick debt and equity ratios are????

A

Financial stability

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14
Q

Gross profit / net sales is what ratio?

A

Gross profit ratio

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15
Q

Net profit / net sales is what ratio?

A

Net profit ratio

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16
Q

Net profit / average owners equity is what rate?

A

Rate of return on equity ratio

17
Q

Net profit + interest expense / Average total assets is what ratio?

A

Rate of return on total assets

18
Q

COGS / Average inventories is what ratio?

A

Rate of turnover of inventories

19
Q

Average accounts receivable x 365 / net credit sales is what ratio?

A

Rate of turnover of accounts receivable

20
Q

Current assets/ current liabilities is what ratio?

A

current ratio

21
Q

Current assets - (inventories + prepayments) / current liabilities - bank overdraft is what ratio?

A

Quick ratio

22
Q

Total liabilities / total assets is what ratio?

A

Debt ratio

23
Q

Total owner’s equity / total assets is what ratio?

A

Equity ratio

Accounting (9 decks)

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