Professional Documents
Culture Documents
Working Capital
The excess of current assets over current liabilities is known as working capital.
Working capital = Current assets Current liabilities
Current ratio
A companys working capital is frequently expressed in ratio form. A companys
current assets divided by its current liabilities is known as the current ratio.
Current ratio =
Current assets___
Current liabilities
Price-Earnings Ratio
The price-earnings ratio expresses the relationship between a stocks market
price per share and its earnings per share.
Price-earnings ratio = Market price per share
Earnings per share
Sales on account________
Average accounts receivable balance