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Cases Midterm
Financial Ratios
| Question | Answer |
|---|---|
| Current Ratio | Current Assets/Current Liabilities |
| Quick Ratio | Current Assets - Inventory/Current Liabilities |
| Cash Flow liquidity | Cash + Marketable Securities + CFO / Current liabilities |
| Average Collection peroid | Accounts Receivable / Average Daily sales |
| Days inventory held | Inventory / Average Daily cost of sales |
| Days Payable Outstanding | Accounts Payable / Daily Cost of Sales |
| Net Trade Cycle | Average Collection + Days Inventory - Days Payable |
| Accounts Receivable Turnover | Net Sales / Accounts Receivable |
| Inventory Turnover | Cost of Goods Sold / Inventory |
| Accounts Payable Turnover | Net Sales / Net PPE |
| Total Asset Turnover | Net Sales / Total Assets |
| Debt | Total Liabilities / Total Assets |
| Long Term Debt to Total Capital | Long Term Debt / (Long term Debt + Shareholder's Equity) |
| Debt to Equity | Total Debt / Shareholder's Equity |
| Times Interest Earned (Interest coverage ratio) | Operating Profit / Interest Expense |
| Gross Profit Margin | Gross Profit / Net Sales |
| Operating Profit Margin | Operating Profit / Net Sales |
| Net Profit Margin | Net Profit / Net Sales |
| Return on Assets (ROA) | Net Earnings / Total Assets |
| Return on Investment (ROI) or (ROE) | Net Earnings / Shareholder's Equity |
| Current Ratio Standard | 1.5 times |
| Quick Ratio Standard | 0.9 : 1 |