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Accounting Ratios
ACCT 2301 Ch 1-13 ratios
| Question | Answer |
|---|---|
| Current ratio | Current assets / Current liabilities |
| Current cash debt coverage ratio | Cash provided by operations / average current liabilities |
| Receivables turnover ratio | Net credit sales / average net receivables |
| Average collection period | 365 / receivables turnover ratio |
| Inventory turnover ratio | Cost of goods sold / average inventory |
| Days in inventory | 365 / inventory turnover ratio |
| Debt to total assets ratio | Total liabilities / total assets |
| Cash debt coverage ratio | Cash provided by operations / average total liabilities |
| Return on assets ratio | Net income / average total assets |
| Profit margin ratio | Net income / net sales |
| Gross profit ratio | Gross profit / net sales |
| Earnings per share | Net income - Preferred stock dividends / average common shares outstanding |