Ratios - FAR CPA Exam

Current Ratio

Current Assets/Current Liabilities

Quick Ratio

Cash & Equivalents + ST Mkt Sec + Receivables (net) / Current Liabilities

Accounts Receivable Turnover

Sales (net)/Average Accounts Receivable (net)

Days Sales in Accounts Receivable

Ending Accounts Receivable (net)/ (Net Sales/365)

Inventory Turnover

Cost of Goods Sold/Average Inventory

Days in Inventory

Ending Inventory/ (Cost of Goods Sold/365)

Accounts Payable Turnover

Cost of Goods Sold / Average Accounts Payable

Days of Payables Outstanding

Ending Accounts Payable/ (Cost of Goods Sold/365)

Cash Conversion Cycle

Days Sales in Accounts Receivable + Days in Inventory - Day of Payables Outstanding

Asset Turnover

Net Sales/ Average total assets

Profit Margin

Net Income/ Net Sales

Return on Assets

Net Income/ Average Total Assets

DuPont Return on Assets

Profit Margin x Asset Turnover

Return on Equity

Net Income/ Average Total Equity

Return on Sales

EBIT/Net Sales

Gross (Profit) Margin

(Net Sales - Cost of Goods Sold)/ Net Sales

Operating Cash Flow Ratio

Cash Flow from Operations / Current Liabilities

Debt to Equity Ratio

Total Liabilities/Total Equity

Total Debt Ratio

total liabilities/total assets

Equity Multiplier

Total Assets/Total Equity

Times Interest Earned

EBIT/ interest expense

Earnings Per Share

(Net Income- Preferred Dividends)/ Weighted Average Common Shares Outstanding

Price Earnings Ratio

Price per share/ Basic Earnings per Share

Dividend Payout

Cash Dividends/ Net Income