Ratios Flashcards Preview

Accounting > Ratios > Flashcards

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

Total owner's equity / total assets is what ratio?

Equity ratio