Chapter 18 Equations Flashcards
(15 cards)
Return on Equity
Net Income / Average Stockholder’s Equity
Return on Assets
Net Income / Average Total Assets
Gross Profit Ratio
Net sales - Cost of Goods Sold / Net sales
Profit Margin (Return on Sales)
Net Income / Net sales
Receivables Turnover Ratio
Net credit sales / Average net account receivable
Average Collection Period
365 / Receivables Turnover
Inventory Turnover Ratio
Cost of Goods Sold / Average inventory
Average Days in Inventory
365 / Inventory Turnover
Asset Turnover
Net sales / Average total assets
Current Ratio
Current assets / Current liabilities
Acid-Test Ratio
Cash + Current investments + Accounts receivable / Current liabilities
Times Interest Earned Ratio
Net Income + interest expense + income tax expense / Interest expense
Debt to Equity Ratio
Total interest - Bearing debt / Stockholder’s Equity
Price Earning Ratio
Stock price / EPS
EPS (Earnings per Share)
Net Income / Average shares outstanding
