Flashcards in Ratios Deck (23):

1

## Gross profit ratio

###
Gross profit / net sales

Percentage

2

## Net profit ratio

###
Net profit / net sales

Percentage

3

## Rate of return on equity ratio

###
Net profit / Average Owner's Equity

Percentage

4

## Rate of return on total assets ratio

###
Net profit + interest expense / Average total assets

Percentage

5

## Rate of turnover of inventories

###
Cost of goods sold / average inventories

times per year

6

## Rate of turnover of accounts receivable

###
Average accounts receivable / Net credit sales x 365

days

7

## Current ratio

###
Current assets / current liabilities

Ratio, decimal

8

## Quick ratio

###
current assets - (inventories + prepayments) / current liabilities

Ratio, decimal

9

## Debt ratio

###
Total liabilities / total assets

Percentage

10

## Equity ratio

###
Total Owner's equity / total assets

Percentage

11

## Gross profit, net profit, rate of return on owner's equity and rate of return on total assets ratios are what?

### Profitability ratios

12

## Rate of turnover of inventories and rate of return of accounts receivable are???

### Effectiveness of management policies

13

## Current, quick debt and equity ratios are????

### Financial stability

14

## Gross profit / net sales is what ratio?

### Gross profit ratio

15

## Net profit / net sales is what ratio?

### Net profit ratio

16

## Net profit / average owners equity is what rate?

### Rate of return on equity ratio

17

## Net profit + interest expense / Average total assets is what ratio?

### Rate of return on total assets

18

## COGS / Average inventories is what ratio?

### Rate of turnover of inventories

19

## Average accounts receivable x 365 / net credit sales is what ratio?

### Rate of turnover of accounts receivable

20

## Current assets/ current liabilities is what ratio?

### current ratio

21

## Current assets - (inventories + prepayments) / current liabilities - bank overdraft is what ratio?

### Quick ratio

22

## Total liabilities / total assets is what ratio?

### Debt ratio

23