Accounting Ratio Terms

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10 Terms

1
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Current Ratio

Current Assets / Current Liabilities

2
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Acid-test Ratio

Quick Assets / Current Liabilities

3
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Debt to Equity Ratio

Total Liabilities / Shareholders’ Equity

4
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Receivable Turnover Ratio

Net Sales / Average Accounts Receivable (Net)

5
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Inventory Turnover Ratio

Cost of Goods Sold / Average Inventory

6
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Profit Margin

Net Income / Net Sales

7
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Asset Turnover

Net Sales / Average Total Assets

8
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Equity Multiplier

Average Total Assets / Average Shareholder’s Equity

9
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Return on Asset

Net Income / Average Total Assets

10
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Return on Equity

Net Income / Average Shareholder’s Equity