BUS 251: IMPORTANT ratios to know to analyze a financial statement

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Last updated 6:23 PM on 4/17/26
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11 Terms

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Current ratio (liquidity)

Current assets/current liabilities

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Quick ratio

Cash + AR + Short term investments / Current liabilities

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Inventory turnover

COGS/ Average inventory

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Days to Sell inventory

365/ Inventory Turnover

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Account Receivables turnover

Net credit sales/average net accounts receivables

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Collection period

365/AR turnover

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Operating Cash Flow Ratio

Net Cash Flow From Operating Activities/ Current Liabilities

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Net Debt as a percentage of total capitalization

Net Debt / Net Debt + Shareholders Equity

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Interest Coverage

Net Income + Interest Expense + taxes expense + depreciation + amortization / interest expense

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Return on assets

Net income / average total assets

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Return on equity

Net income / average shareholders equity