UCLA Management 1A Ratios (Gardner)

Current Ratio

Current Assets / Current Liabilities

Acid-Test Ratio

(Cash + Short-term Investment + Current Receivables) / Current Liabilities

Accounts Receivable Turnover

Net Sales / Average Accounts Receivable, Net

Inventory Turnover

COGS / Average Inventory

Days’ Sales Uncollected

(Accounts Receivable, Net / Sales) x 365

Days’ Sales in Inventory

(Ending inventory / Cost of Goods Sold) x 365

Total Asset Turnover

Net Sales / Average Total Assets

Debt Ratio

Total Liabilities / Total Assets

Equity Ratio

Total Equity / Total Assets

Debt to Equity Ratio

Total Liabilities / Total Equity

Times Interest Earned

Income before interest expense and income taxes / Interest Expense

Profit Margin Ratio

Net Income / Net Sales

Gross Margin Ratio

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

Return on Total Assets

Net Income / Average Total Assets

Return on Common Stockholders’ Equity

(Net income - preferred dividends) / Average common stockholder’s equity

Basic Earnings Per Share

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

Price-Earnings Ratio

Market Price Per Share / Earnings Per Share

Dividend Yield

Annual Cash Dividends Per Share / Market Price Per Share