Ratios Flashcards
Acid-Test Ratio
Cash equivalents + Marketable Securities + Net Receivables/Current Liabilities
Accounts Receivable Turnover
Net Credit Sales/ Average Net Receivables
A/R Turnover in Days
Average Net Receivables/ Net credit sales/365
Inventory Turnover
COGS/ Avg Inventory
Inventory Turnover in Days
Avg Inventory/ COGS/365
Operating Cycle
of Days b/t acquisition of inventory and realization of cash from selling inventoryAR turnover in days + Inventory turnover in days
Working Capital Turnover
How effective working capital used
Sales/ Avg Working Capital
Total Asset Turnover
Net Sales/ Avg Total Assets
Return on Total Assets
Net income/ Avg Total Assets
Dupont Return on Assets
Net profit margin x Total asset turnover
Return on Investment
Net income + interest expense (1-tax rate)
/Average (L/T liabilities + equity)
Return on common equity
Net income - Pref dividends/ Avg Common Equity
Debt to Equity
Degree of protection to creditors in case of insolvency
Total Liabilities/ Common Stockholder’s Equity
Debt Ratio
Total Liabilities/ Total Assets
Times Interest Earned
Ability of company to cover interest charges
Recurring income b/f taxes & interest/ interest
