Ratios Flashcards
Working Capital
Current Assets - Current Liabilities
Working Capital Ratio
Current Assets / Current Liabilties
Working Capital ratio is also called what?
Current Ratio
Acid-Test Ratio (Quick Ratio)
(Cash + Net Receivables + Marketable Securities) / Current Liabilities
Securities Defensive-Interval Raios
(Cash + Net Receivables + Marketable Securities) / Average Daily Cash Expenditures
Times Interest Earned
(Net Income + Interest Expense + Income Tax) / Interest Expense
Times Preferred Dividend Earned Ratio
Net Income / Annual Preferred Dividend Obligation
Accounts Receivable Turnover
Net Credit Sales / Average net AR
Number of Days’ Sales in Average Receivables
Days in Year (ie 360) / AR Turnover Ratio
Inventory Turnover
COGS / Average Inventory
Number of Days’ Supply in Inventory
Days in Year (ie 360) / Inventory Turnover Ratio
Days in Operating Cycle
Number of Days’ in Sale in AR + Length Cycle Number of Days’ Supply in Inventory
Profit Margin
Net Income / Net Sales
Return on Total Assets
(Net Income + Interest Expense (net of Tax Effect)) / Average Total Assets
Return on Common Stockholder’s Equity
(Net Income - Preferred Dividend (for current period only)) / Average Common Stockholders’ Equity
