Ratios Flashcards
1
Q
Gross profit
A
Gross Profit/net sales %
2
Q
Net Profit
A
Net Profit/Net Sales %
3
Q
Rate of return on equity ratio
A
Net profit/average owners equity %
4
Q
Rate of return on total assets ratio
A
Net profit + interest expense/average total assets %
5
Q
Rate of return of inventories
A
Cost of goods sold/ average inventories (times per year)
6
Q
Rate of return of accounts receivable
A
Average accounts receivable/net credit sales x 365 (days per year)
7
Q
Current Ratio
A
Current assets/current liabilities (two decimal places)
8
Q
Quick Ratio
A
Current Assets-(inventories +prepayments)/current liabilities-bank overdraft (two decimal places)
9
Q
Debt Ratio
A
Total Liabilities/Total assets %
10
Q
Equity Ratio
A
Total Owners equity/ Total assets %
