FAR - Ratio & Variance Analysis
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14 Terms
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How is gross margin calculated?
(Net Sales - COGS)/Net Sales
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How is profit margin calculated?
Net Income/Net Sales
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How is return on equity (ROE) calculated?
Net Income/Average Total Equity
4
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How is return on assets (ROA) calculated?
Net Income/Average Total Assets
5
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What is the operating cash flow ratio formula?
CF from Operations/Ending Current Liabilities
6
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What is the current ratio formula?
Current Assets/Current Liabilities
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What is the quick ratio formula?
(Cash + ST Marketable Securities + Net Receivables)/Current Liabilities
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How is days in inventory calculated?
Ending Inventory/(COGS/365)
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How is days sales in accounts receivable calculated?
Net Ending AR/(Net Sales/365)
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How is days of payables outstanding calculated?
Ending AP/(COGS/365)
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What is the cash conversion cycle formula?
Days in Inventory + Days Sales in AR - Days of Payables Outstanding
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What is the debt-to-equity ratio formula?
Total Liabilities/Total Equity
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What is the total debt ratio formula?
total liabilities/total assets
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What is the times interest earned formula?
EBIT/Interest Expense
Note 
Flashcards (47)