Ratios (chapters 1-3) Flashcards
1
Q
Accounting Equation
A
Assets= Liabilities + Owner’s Equity
2
Q
Net Income
A
Revenue - Expenses
3
Q
Return on Assets
A
Net Income/ Average Total Assets
4
Q
Average Total Assets
A
(Beginning Assets + Ending Assets)/2
5
Q
Current Ratio
A
Current Assets/ Current Liabilities
6
Q
Debt Ratio
A
Total Liabilities/ Total Assets
7
Q
Profit Margin Ratio
A
Net Income/ Net Sales
8
Q
Price to Earnings Ratio
A
Price Per Share/ Earnings Per Share
