# 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…

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…

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…

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…

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…

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…

gearing

leverage

high leverage

high gearing

The relationship between the debt and the equity of a business…

The relationship between the debt and the equity of a business…

There is a high level of borrowed external funds compared to i…

There is a high level of borrowed external funds compared to i…

gearing

The relationship between the debt and the equity of a business…

leverage

The relationship between the debt and the equity of a business…

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

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

Current Ratio

Debt Ratio

Inventory Turnover Ratio

Return on Net Sales

Current Assets/Current Liabilities

Total Liabilities / Total Assets

Cost of Goods Sold / Average Inventory

Net Income/Net Sales x 100%

Current Ratio

Current Assets/Current Liabilities

Debt Ratio

Total Liabilities / Total Assets

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

Liquidity ratios

Financial leverage ratios

Efficiency ratios

Profitability ratios

Ability of a firm to obtain the cash it needs to pay short-ter…

Debt:Equity ratio (gearing)

indicate how efficiently a venture uses its assets in producin…

indicates if a company is generating a profit and an adequate…

Liquidity ratios

Ability of a firm to obtain the cash it needs to pay short-ter…

Financial leverage ratios

Debt:Equity ratio (gearing)

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

working capital

acid-test (quick) ratio

accounts receivable turnover

=current assests/current liabilities. ... measures short-term deb…

=current assests-current liabilities. ... measures how much capit…

cash+ short-term investments+ AR/current liabilities... measures…

=net credit sales/avg net AR. ... measures liquidity of accounts…

current ratio

=current assests/current liabilities. ... measures short-term deb…

working capital

=current assests-current liabilities. ... measures how much capit…