Liquidity Ratios + Profitability Ratios Flashcards

1
Q

current ratio

A

current ratio = current assets / current liabilities

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2
Q

quick ratio

A

quick ratio = (cash + receivables + marketable securities) / current liabilities

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3
Q

cash ratio

A

cash ratio = (cash + marketable securities) / current liabilities

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4
Q

defensive interval

A

defensive interval = ( cash + receivables + marketable securities) / average daily expenditures

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5
Q

net profit margin

A

net profit margin = net income / revenue

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6
Q

gross profit margin

A

gross profit margin = gross profit / revenue

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7
Q

operating profit margin

A

operating profit margin = operating income OR EBIT / revenue

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8
Q

pretax margin

A

pretax margin = EBT / revenue

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9
Q

ROA

A

ROA = net income / average total assets

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10
Q

interest adjusted ROA

A

ROA = ( net income + interest expense* (1- t ))/ average total assets

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11
Q

operating return on asset

A

operating return on asset = operating income OR EBIT / average total assets

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12
Q

return on total capital

A

return on total capital = EBIT / total capital

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13
Q

total capital

A

total capital = short and long term debt + preferred equity + common equity

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14
Q

ROE

A

ROE = net income / average total equity

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15
Q

return on common equity

A

return on common equity = (net income - preferred dividends) / average total equity

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16
Q

Dupont

A

return on equity = net profit margin × asset turnover × leverage ratio

17
Q

Dupont

A