# Study sets matching "accounting ratios"

Study sets

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Current Ratio

Quick ("Acid Test") Ratio

Interest Coverage (Times Interest Earne…

Return on Assets (ROA)

Current Assets/Current Liabilities... Firm's ability to meet its…

(Cash + Marketable Securities + Accounts Receivable)/Current L…

EBIT/Interest Expense... Indicates the relative protection that…

Net Income/Average Total Assets... Firm's performance in using a…

Current Ratio

Current Assets/Current Liabilities... Firm's ability to meet its…

Quick ("Acid Test") Ratio

(Cash + Marketable Securities + Accounts Receivable)/Current L…

current ratio

quick or acid test

return on equity

return on capital employed

the higher this ratio, the more able a company is to pay back…

an indicator of whether a firm has enough short term assets to…

compares net income to average shareholder equity; measures ho…

possibly better than return on equity because it shows how wel…

current ratio

the higher this ratio, the more able a company is to pay back…

quick or acid test

an indicator of whether a firm has enough short term assets to…

Earnings Per Share

Profit Margin Ratio

Return on Investment

Working capital

**profitability ratio**... meausers the net income earned on each s…

**Profitability ratio**... measures amount of net income earned wit…

Net Profit... -------------------... Common stock... *Profitability rat…

**Liquidity Ratio**... Current Assets - Current Liabilities

Earnings Per Share

**profitability ratio**... meausers the net income earned on each s…

Profit Margin Ratio

**Profitability ratio**... measures amount of net income earned wit…

Profitability

Managerial Effectiveness

Financial Stability

Cash Flow

%Gross Profit... %Net Profit... %Return on Equity... %Return on Assets

(Days)Turnover of Inventories Rate... (Days)Turnover of A/c Recei…

_:1 Current... _:1 Quick... %Debt... %Equity

%Cash Flow to Revenue... %Cash Flow Adequacy... (Times)Long-term Deb…

Profitability

%Gross Profit... %Net Profit... %Return on Equity... %Return on Assets

Managerial Effectiveness

(Days)Turnover of Inventories Rate... (Days)Turnover of A/c Recei…

Current Ratio

Acid-test ratio

Accounts receivable turnover

Inventory turnover

Current assets / current liabilities

Cash+ short-term investments + current receivables /current li…

Net Sales / Average accounts receivable, net

COGS / Average inventory

Current Ratio

Current assets / current liabilities

Acid-test ratio

Cash+ short-term investments + current receivables /current li…

working capital

current ratio

inventory turnover

days in inventory

=current assets - current liabilities... liquidity ratio

=current assets/ current liabilities... liquidity ratio... 1.25: com…

=cost of goods sold/ average inventory... liquidity ratio... 8: comp…

=365 days/ inventory turnover... liquidity ratio... 46: company take…

working capital

=current assets - current liabilities... liquidity ratio

current ratio

=current assets/ current liabilities... liquidity ratio... 1.25: com…

Current Ratio (Up or down?)

Current Ratio

Gross Margin Ratio (Up or down?)

Gross Margin Ratio

^ 2:1 Ratio is good, Used with the Balance Sheet

Explains what a comfortable amount of working capital is, the…

^ is better shows direct profit from sales, Used with the Inco…

It is the excess of Sales of COGS, it generally shows profitab…

Current Ratio (Up or down?)

^ 2:1 Ratio is good, Used with the Balance Sheet

Current Ratio

Explains what a comfortable amount of working capital is, the…

Formula for Gross Profit Ratio

prices of goods enough to cover all cos…

compares profit to costs (i.e. 50% ----…

highlights shifts in number and variety…

=(gross profit/net sales)*100

Gross Profit Ratio

Gross Profit Ratio

Gross Profit Ratio

Formula for Gross Profit Ratio

=(gross profit/net sales)*100

prices of goods enough to cover all cos…

Gross Profit Ratio

Quick Ratio

Current Ratio

Gross Margin Ratio

Return on Sales Ratio

Cash + Short Term Investments + Receivables/ Current Liabiliti…

Current Assets / Current Liabilities

Gross Margin/ Sales

Net Income/ Sales

Quick Ratio

Cash + Short Term Investments + Receivables/ Current Liabiliti…

Current Ratio

Current Assets / Current Liabilities

Working Capital Ratio

Current Ratio

Cash Ratio

Acid-test Ratio

Current Assets - Current Liabilities

Total Current Assets ÷ Total Current Liabilities

(Cash + Cash equivalents) ÷ Total Current Liabilities

(Cash including cash equivalents + Short-term investments + Ne…

Working Capital Ratio

Current Assets - Current Liabilities

Current Ratio

Total Current Assets ÷ Total Current Liabilities

Return on Equity (ROE)

Earnings per Share (EPS)

Profit Margin

Current Ratio

Net Income/Average SE

Net Income/Average # of common shares outstanding

Net Income/Net Sales

Current Assets/Current Liabilities

Return on Equity (ROE)

Net Income/Average SE

Earnings per Share (EPS)

Net Income/Average # of common shares outstanding

acid-test ratio

gross margin ratio

inventory turnover

days' sales in inventory

cash and cash equivalents plus short-term investments plus cur…

net sales minus cost of goods sold divided by net sales

cost of goods sold divided by average inventory

ending inventory divided by cost of goods sold times 365

acid-test ratio

cash and cash equivalents plus short-term investments plus cur…

gross margin ratio

net sales minus cost of goods sold divided by net sales

current ratio

quick (acid test) ratio

accounts receivables turnover

days' sales outstanding

current assets // current liabilities

(cash + short term investments + net current receivables) // t…

net credit sales // average net accounts receivable

365 // accounts receivable turnover

current ratio

current assets // current liabilities

quick (acid test) ratio

(cash + short term investments + net current receivables) // t…

Debt ratio

Return on Investment

Return on Assets

Asset Turnover

Total liabilities/total assets.... Measures the ratio of assets f…

Net Profit/average capital.... Measures how effectively a busines…

Net Profit/average total assets.... Measures how effectively busi…

Sales/average total assets.... Measures how productively a busine…

Debt ratio

Total liabilities/total assets.... Measures the ratio of assets f…

Return on Investment

Net Profit/average capital.... Measures how effectively a busines…

Working Capital

Current Ratio

Inventory Turnover

Days in Inventory

Current Assets - Current Liabilities

Current Assets/Current Liabilities... Determines dollars of asse…

COGS/Avg. Inventory... Indicates the liquidity of inventory by m…

365 days/Inventory Turnover... Avg number of days inventory is h…

Working Capital

Current Assets - Current Liabilities

Current Ratio

Current Assets/Current Liabilities... Determines dollars of asse…

Return on Equity

Return on Total Assets

Net profit Margin

GROSS PROFIT MARGIN

looks at the return the owner is getting for the money he has…

It looks at how well the business' assets are performing. Give…

Looks a the return of the final profit figure generated from t…

Looks at the return of profit made directly from the buying an…

Return on Equity

looks at the return the owner is getting for the money he has…

Return on Total Assets

It looks at how well the business' assets are performing. Give…

current ratio

Accounts Receivable

Average collection period

Inventory turnover

for every dollar of current liabilities, it has $$ of current…

measures the number of times, on average, a company collects r…

365/accounts receivable turnover... used to assess the effective…

measures the number of times average inventory was sold during…

current ratio

for every dollar of current liabilities, it has $$ of current…

Accounts Receivable

measures the number of times, on average, a company collects r…

Current Ratio

Quick Ratio

Accts R Turnover

Days Sales in Accts R

Current Assets / Current Liabilities

(Cash + Short-Term Investments + Accts R) / Current Liabilities

Net Credit Sales / Avg Net Accts R

365 / Accts R Turnover

Current Ratio

Current Assets / Current Liabilities

Quick Ratio

(Cash + Short-Term Investments + Accts R) / Current Liabilities

Working Capital

Current Ratio

Cash Ratio

Acid/Quick Ratio

H! A business's ability to meet its short term obligations wit…

H! The company's ability to pay current liabilities from curre…

H! The company's ability to pay current liabilities from cash…

H! The company's ability to pay all its current liabilities if…

Working Capital

H! A business's ability to meet its short term obligations wit…

Current Ratio

H! The company's ability to pay current liabilities from curre…