F2 - Ratios Flashcards
Times interest earned is calculated as:
Net Income before income taxes + Int Exp Divided by Interest expense
or
Earnings before Int exp + Int exp Divided by int expense
Net Profit Margin
Net Income / Sales
Return on assets
Net income / Avg total assets
Days in inventory
End Inventory / (COGS/365)
Current Ratio
Current Assets / Current Liabilities
DuPont return on assets formula:
Net income / Avg total assets
Debt to equity raito
Total Liab / Equity
To find total liab when not given L = A-E
Quick Ratio
Current assest excluding inventory/prepaid divided by current liab
The following financial ratios and calculations were based on information from Kohl Co.’s financial statements for the current year:
Accounts receivable turnover
Ten times during the year
Asset turnover
Two times during the year
Average receivables during the year
$200,000
What was Kohl’s average total assets for the year?
- Total Asset turnover = net sale/AVG total assets
- avg total assets = net sales / total asst turn over
- 200,000*10/2 =1,000,000
