Ratios And Calculations For Aud Flashcards
Return on equity, equation
Return on equity = net income/equity
Return on Assets, equation
Return on assets = net income/assets
Working capital, equation
Working capital = current assets - current liabilities
Current ratio, equation
Current ratio = current assets/current liabilities
Quick ratio, equation
Quick ratio = quick assets/current liabilities
Quick assets 3
1 cash
2 A/R
3 marketable securities
Accounts receivable turnover ratio, equation
Accounts receivable turnover = sales/accounts receivable
Inventory turnover ratio, equation
Inventory turnover = cost of goods sold/inventory
Total asset turnover, equation
Total asset turnover = sales/total assets
Gross margin percentage, equation
Gross margin percentage = gross margin/sales
Net operating margin percentage, equation
Net operating margin % = operating income/sales
Times interest earned, equation
Times interest earned = operating income/interest expense
Total debt to equity percentage, equation
Total debt to equity percentage = total debt/owner’s equity
Total debt (in the total debt to equity percentage)
Total debt = total current liabilities + long term debt
Owners’ equity (in the total debt to equity percentage)
Owners’ equity = common stock + retained earnings
