Financial Ratios
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| 597957529 | What ratio measures a firm's short term ability to pay maturing obligations? | Liquidity Ratio | |
| 616573703 | Working capital = | Current assets - current liabilities | |
| 616573704 | Current ratio (working capital ratio) = | Current assets / current liabilities | |
| 616573705 | Acid test ratio = | (cash equivalents + marketable securities + net receivables) / current liabilities | |
| 616573706 | Cash ratio = | (cash equivalents + marketable securities) / current liabilities | |
| 597957530 | What ratio measures how effectively an enterprise is using its assets? | Activity Ratio | |
| 616573707 | A/R Turnover = | net credit sales / average net receivables | |
| 616573708 | A/R Turnover in days = | average net receivables / (net credit sales/365) | |
| 616573709 | Inventory turnover = | COGS / average inventory | |
| 616573710 | Inventory turnover in days = | average inventory / (COGS/365) | |
| 616573711 | Operating cycle = | A/R turnover in days + inventory turnover in days | |
| 616573712 | Working capital turnover = | Sales / average working capital | |
| 616573713 | Total asset turnover = | net sales / average total assets | |
| 616573714 | A/P turnover = | COGS / average A/P | |
| 616573715 | Days in A/P = | average A/P / (COGS/365) | |
| 597957531 | What ratio measures the success or failure of an enterprise for a given time? | Profitability Ratio | |
| 616573716 | Net profit margin = | Net income / net sales | |
| 616573717 | Return on total assets = | Net income / average total assets | |
| 616573718 | Return on assets = | Net profit margin x total asset turnover | |
| 616573719 | Return on investments = | (Net income + interest expense(1 - tax rate)) / average (long term liabilities + equity) | |
| 616573720 | Return on common equity = | (Net income - preferred dividends) / average common equity | |
| 616573721 | Net operating margin percentage = | Net operating income / net sales | |
| 616573722 | Gross profit margin percentage = | Gross profit margin / net sales | |
| 616573723 | Operating cash flow per share = | Operating cash flow / common shares outstanding | |
| 597957532 | What ratio measures interest to investors? | Investor Ratio | |
| 616573724 | Degree of financial leverage = | Earning before interest and taxes / earnings before taxes | |
| 616573725 | Earnings per share = | (net income - preferred dividends) / weighted average number of common shares outstanding | |
| 616573726 | Price/earnings ratio = | Market price per share / diluted earnings per share | |
| 616573727 | Dividend payout ratio = | Dividends per common share / diluted earnings per share | |
| 616573728 | Dividend yield = | Dividends per common share / market price per common share | |
| 616573729 | Book value per share = | (Total stockholders' equity - preferred stock) / number of common shares outstanding | |
| 597957533 | What ratio measures the security for long term creditors/investors | Long term debt paying ability ratio | |
| 597957534 | What is the main limitation of ratios? | They depend entirely on the reliability of the data on which they are based | |
| 597957535 | What is common size analysis? | Common size f/s are used to compare a company's performance with the performance of other smaller/larger companies | |
| 616573730 | Debt / Equity = | Total liabilities / common stockholders' equity | |
| 616573731 | Debt ratio = | Total liabilities / total assets | |
| 616573732 | Times interest earned = | Recurring income before taxes before taxes and interest / interest | |
| 616573733 | Operating cash flow / total debt = | Operating cash flow / total debt |
