Accounting Ratios

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Ratio Analysis

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11 Terms

1
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Current Ratio

current assets ÷ current liabilities

2
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Acid Test Ratio

(Cash + short term investments + current receivables) ÷ current liabilities

3
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Days' Sales Uncollected

accounts receivable, net ÷ net sales × 365

4
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Inventory Turnover

cost of goods sold ÷ average inventory

5
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Days' Sales in Inventory

ending inventory ÷ cost of goods sold × 365

6
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Debt-to-Equity Ratio

total liabilities ÷ total equity

7
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Times Interest Earned

income before interest expense and income taxes ÷ interest expense

8
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Profit Margin Ratio

net income ÷ net sales

9
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Total Asset Turnover

net sales ÷ average totaled assets

10
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Return on Total Assets

net income ÷ average total assets

11
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Return on Equity

net income ÷ average total equity