Ratios Flashcards
(23 cards)
Gross profit ratio
Gross profit / net sales
Percentage
Net profit ratio
Net profit / net sales
Percentage
Rate of return on equity ratio
Net profit / Average Owner’s Equity
Percentage
Rate of return on total assets ratio
Net profit + interest expense / Average total assets
Percentage
Rate of turnover of inventories
Cost of goods sold / average inventories
times per year
Rate of turnover of accounts receivable
Average accounts receivable / Net credit sales x 365
days
Current ratio
Current assets / current liabilities
Ratio, decimal
Quick ratio
current assets - (inventories + prepayments) / current liabilities
Ratio, decimal
Debt ratio
Total liabilities / total assets
Percentage
Equity ratio
Total Owner’s equity / total assets
Percentage
Gross profit, net profit, rate of return on owner’s equity and rate of return on total assets ratios are what?
Profitability ratios
Rate of turnover of inventories and rate of return of accounts receivable are???
Effectiveness of management policies
Current, quick debt and equity ratios are????
Financial stability
Gross profit / net sales is what ratio?
Gross profit ratio
Net profit / net sales is what ratio?
Net profit ratio
Net profit / average owners equity is what rate?
Rate of return on equity ratio
Net profit + interest expense / Average total assets is what ratio?
Rate of return on total assets
COGS / Average inventories is what ratio?
Rate of turnover of inventories
Average accounts receivable x 365 / net credit sales is what ratio?
Rate of turnover of accounts receivable
Current assets/ current liabilities is what ratio?
current ratio
Current assets - (inventories + prepayments) / current liabilities - bank overdraft is what ratio?
Quick ratio
Total liabilities / total assets is what ratio?
Debt ratio
Total owner’s equity / total assets is what ratio?
Equity ratio
