Financial Accounting Ratios

9 terms by jshe

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Current Ratio

Current assets
Current liabilities

Acid-Test Ratio

(Cash + Short-term investments + Net current receivables)
Current liabilities

Inventory Turnover

Average inventory

A/R Turnover

Net credit sales
Average net A/R

Debt Ratio

Total liabilities
Total assets


Net income
Net sales


(Net income + Interest expense * (1 - tax rate))
Average total assets


(Net income - Preferred dividends)
Average Common SE


(Net income - Preferred dividends)
Average number of shares of common stock outstanding

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