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Accounting Ratios
ACCT 2301 Ch 1-13 ratios
Question | Answer |
---|---|
Current ratio | Current assets / Current liabilities |
Current cash debt coverage ratio | Cash provided by operations / average current liabilities |
Receivables turnover ratio | Net credit sales / average net receivables |
Average collection period | 365 / receivables turnover ratio |
Inventory turnover ratio | Cost of goods sold / average inventory |
Days in inventory | 365 / inventory turnover ratio |
Debt to total assets ratio | Total liabilities / total assets |
Cash debt coverage ratio | Cash provided by operations / average total liabilities |
Return on assets ratio | Net income / average total assets |
Profit margin ratio | Net income / net sales |
Gross profit ratio | Gross profit / net sales |
Earnings per share | Net income - Preferred stock dividends / average common shares outstanding |