# 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…

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…

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…

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

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 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

Acid Test (Quick) Ratio

Acid Test Ratio Details

Inventory Turnover

Inventory turnover Details

Cash + A/R + Marketable Securities + CD's within 1 year / Curr…

tell whether a company's current liabilities can be paid with…

How many times the company sells its average inventory

Acid Test (Quick) Ratio

Cash + A/R + Marketable Securities + CD's within 1 year / Curr…

Acid Test Ratio Details

tell whether a company's current liabilities can be paid with…

Current ratio

Acid test ratio

A/R turnover

Total asset turnover

Current assets/ current liabilities

(Cash+S.T. Investments+current receivables)/ current liabiliti…

Net sales / A/R, net

Net sales / average total assets

Current ratio

Current assets/ current liabilities

Acid test ratio

(Cash+S.T. Investments+current receivables)/ current liabiliti…

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…

Accounts Receivable Turnover

Acid Test Ratio

Profit Margin

Earnings Per Share

(Net Credit Sales) / (Average Net Accounts Receivable)

(Cash + Short Term Investments + Accounts Rec.) / (Current Lia…

(Net Income) / (Net Sales)

(Net Income - Preferred Dividends) / (Weighted Average Common…

Accounts Receivable Turnover

(Net Credit Sales) / (Average Net Accounts Receivable)

Acid Test Ratio

(Cash + Short Term Investments + Accounts Rec.) / (Current Lia…

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 capital employed

Gross profit mark up/margin percentage

Net profit percentage

Current ratio 2:1

Net profit + interest / capital employed x100

Gross profit / cost of sales x100

Net profit + interest / sales x100

Current assets / current liabilities :1

Return on capital employed

Net profit + interest / capital employed x100

Gross profit mark up/margin percentage

Gross profit / cost of sales x100