Financial Ratio

Question 1

Current Ratio

Answer 1

Current Asset ÷ Current Liability (LR)

Question 2

Gross Profit Margin

Answer 2

(Gross Profit ÷ Revenue) × 100 (PR)

Question 3

Inventory Turnover

Answer 3

Cost of Goods Sold ÷ Average Inventory (E/AR)

Question 4

Debt to Equity Ratio

Answer 4

Total Liabilities ÷ Shareholders’ Equity (S/LR)

Question 5

Earnings Per Share (EPS)

Answer 5

Net Income ÷ Number of Outstanding Shares (MR)

Question 6

Quick Ratio

Answer 6

(Current Assets - Inventory) ÷ Current Liability (LR)

Question 7

Net Profit Margin

Answer 7

(Net Income ÷ Revenue) × 100 (PR)

Question 8

Accounts Recoverable Turnover

Answer 8

Net Credit Sales ÷ Average Accounts Receivable (E/AR)

Question 9

Interest Coverage Ratio

Answer 9

EBIT ÷ Interest Expense (S/LR)

Question 10

Price-to-Earnings (P/E) Ratio

Answer 10

Market Price Per Share ÷ Earnings Per Share (MR)

Question 11

Cash Ratio

Answer 11

Cash ÷ Current Liability (LR)

Question 12

Return of Assets (ROA)

Answer 12

(Net Income ÷ Total Assets) × 100 (PR)

Question 13

Asset Turnover Ratio

Answer 13

Revenue ÷ Total Assets (E/AR)

Question 14

Debt Ratio

Answer 14

Total Liabilities ÷ Total Assets (S/LR)

Question 15

Dividend Yield

Answer 15

Dividend Per Share ÷ Market Price Per Share (MR)

Question 16

Return on Equity (ROE)

Answer 16

(Net Income ÷ Shareholders’ Equity) × 100 (E/AR)