accounting ratios
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39 Terms
current ratio
current assets / current liabilities
accounts receivable turnover
net credit sales / average accounts receivable
average collections period
365 / accounts receivable turnover
inventory turnover
cost of goods sold / average inventory
days in inventory
365 / inventory turnover
debt to assets ratio
total liabilities / total assets
times interest earned ratio
income before interest and taxes / interest expense
free cash flow ratio
net cash provided by operating activities - capital expenditures - dividends paid
asset turnover ratio
net sales / average total assets
return on assets ratio
net income / average total assets
return on common stockholders’ equity ratio
net income / average common equity
profit margin ratio
net income / net sales
gross profit ratio
gross profit / net sales
how to find gross profit
net sales - COGS
earnings per share ratio
(net income - preferred dividends) / average common shares outstanding
price/earnings ratio
market price per share / earnings per share
payout ratio
cash dividends / net income
liquidity ratio
measures ability to meet current obligations
solvency ratio
gauges long-term survival
profitability ratio
evaluates operating success
what are all the liquidity ratios
current ratio, accounts receivable turnover, average collection period, inventory turnover, and days in inventory
what ratio is current ratio
liquidity ratio
what ratio is accounts receivable turnover
liquidity ratio
what ratio is average collection period
liquidity ratio
what ratio is inventory turnover
liquidity ratio
what ratio is days in inventory
liquidity ratio
what are all the solvency ratios
debt-to-assets, times interest earned, and free cash flow
what ratio is debt-to-assets
solvency ratio
what ratio is times interest earned
solvency ratio
what ratio is free cash flow
solvency ratio
what are all the profitability ratios
asset turnover, return on total assets, return on common stockholders’ equity, profit margin, gross profit rate, earnings per share, price/earnings ratio, and payout ratio
what ratio is asset turnover
profitability ratio
what ratio is return on total assets
profitability ratio
what ratio is return on common stockholders’ equity
profitability ratio
what ratio is profit margin
profitability ratio
what ratio is gross profit rate
profitability ratio
what ratio is earnings per share
profitability ratio
what ratio is price/earnings ratio
profitability ratio
what ratio is payout ratio
profitability ratio