acct 2301 unit 2 ratios

receivables turnover ratio

• # times per year the average accounts receivable balance is collected

• how quickly can u collect cash from accounts receivables

avg collection period

• approximate days average accounts receivable balance is outstanding

inventory turnover ratio

• # times firm sells its average inventory balance during reporting period

avg days in inventory

• # of days average inventory is held

gross profit ratio/percentage

• amount by which sale of inventory exceeds its cost per dollar of sales

return on assets

• amount of net income generated for each dollar invested in assets

profit margin

• earnings per dollar of sales

asset turnover

• sales per dollar of assets invested

net credit sales/avg accts receivable

receivables turnover ratio

365/receivables turnover ratio

avg collection period

COGS/avg inventory

inventory turnover ratio

365/inventory turnover ratio

avg days in inventory

gross profit/net sales

gross profit ratio

net income/avg total assets

return on assets

net income/net sales

profit margin

sales rev-COGS

• gross profit

gross profit- operating expenses

net income

beginning inventory + purchases-purchase returns-ending inventory

COGS (one way, the other is thru sales rev-gross profit)