click below
click below
Normal Size Small Size show me how
Financial Ratios
Test 1
| Term | Definition |
|---|---|
| Current Ratio | Current Assets/Current Liabilities |
| Quick Ratio (Acid-test Ratio) | (Current Assets - Inventory)/Current Liabilities |
| Inventory Turnover | COGS/Inventory |
| Inventory Holding Period | 365/Inventory Turnover Ratio |
| Accounts Receivable Turnover | Credit Sales/Accounts Receivable |
| Average Collection Period | 365/Accounts Receivable Turnover Ratio |
| A/P Turnover | COGS/Accounts Paybable |
| Fixed Asset Turnover | Sales/Fixed Assets |
| Total Asset Turnover | Sales/Total Assets |
| Debt Ratio | Total Debt/Total Assets |
| Debt-to-Equity | Total Debt/Total Equity |
| Equity Multiplier | Total Assets/Total Equity |
| Times Interest Earned | EBIT/Interest |
| Gross Profit Margin | (Sales - COGS)/Sales |
| Operating Profit Margin | EBIT/Sales |
| Profit Margin | Net Income/Sales |
| ROA | Net Income/Total Assets |
| ROE | Net Income/Equity |
| Dividend Payout | Common Stock Dividends/Net Income |
| Retention Ratio | Addition to Retained Earnings/Net Income OR 1 - Dividend Payout Ratio |
| DuPont Analysis | Examines ROE analyzing profit margin, total asset turnover, and financial leverage |
| Working Captial | Current Assets - Current Liabilities |
| DuPont Model ROE | (Asset Turnover*Profit Margin*Equity Multiplier)/Total Asset Turnover |
| Gross Profit | Sales - COGS |
| EPS | Net Income/Shares |