Post on 02-Jan-2017
Return on Investment (ROI)
Net Profit Before Taxes_________________________________________________________
Owner’s Equity
The proportion of sales that isrealized as the profit of the firm
Calculating Financial Ratios
Return on Sales (ROS)
Net Profit Before Taxes_________________________________________________________
Net Sales
The proportion of sales that isrealized as the profit of the firm
Calculating Financial Ratios
Debt to Asset Ratio
Total Liabilities_________________________________________________________
Total Assets
The proportion of assets that wouldhave to be liquidated to repay all debts
Calculating Financial Ratios
Current Ratio
Current Assets_________________________________________________________
Current Liabilities
Indicates the ability of the level of currentassets to be liquidated and
retire the firms current liabilities
Calculating Financial Ratios
Quick Ratio
Current Assets - Inventory_________________________________________________________
Current Liabilities
Defines whether the level currentassets minus inventory is sufficient
to retire current liabilities
Calculating Financial Ratios
Average Collection Period
Credit Sales_________________________________________________________
Accounts Receivable
Demonstrates the number of timesin a period that accounts receivable turn over
Calculating Financial Ratios
Inventory Turnover Rate
Cost of Goods Sold_________________________________________________________
Average Inventory
Demonstrates the number oftimes in a period that inventory turns over
Calculating Financial Ratios
Cash Turnover Rate
Net Sales_________________________________________________________
Current Assets – Current Liabilities
The proportion of sales that isrealized as the profit of the firm
Calculating Financial Ratios
Sales Per Square Foot
Net Sales_________________________________________________________
Square Footage of Selling Space
Indicates the level of sales per squarefoot of selling space
Calculating Financial Ratios
Sales Per Hour
Net Sales_________________________________________________________
Number of Working Hours in Period
Indicates the level of sales per numberof employee working hours in the period
Calculating Financial Ratios
Sales Per Employee
Net Sales_________________________________________________________
Number of Full-time Equivalent Employees
Indicates the level of sales per numberof full-time employee equivalents
Calculating Financial Ratios
Sales to Total Assets
Net Sales_________________________________________________________
Total Assets
Indicates the level of sales per dollarof assets invested in the business
Calculating Financial Ratios