Formulas Sheet

➢ Liquidity Ratios:
- Current ratio = Current Assets / Current Liabilities

- Quick ratio = (Current Assets – Inventories) / Current Liabilities

➢ Activity Ratios:
- Total Assets Turnover = Sales Revenue / Total Assets

- Fixed Assets Turnover = Sales Revenue / Fixed Assets

Note: Current Assets = Total Assets – Fixed Assets

- Accounts Receivable Turnover = Sales on Credit / Accounts Receivable

- Accounts Receivable Turnover = 360 / Average Collection Period

- Inventory Turnover = Cost of Goods Sold (COGS) / Inventory

- Inventory Turnover = 360 / Number of Days in Inventory

- Accounts Payable Turnover = Purchases on Credit / Accounts Payable

- Accounts Payable Turnover = 360 / Average Payment Period

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➢ Profitability Ratios:
- Net profit Margin = Net Profit / Sales Revenue

- Gross Profit Margin = Gross Profit / Sales Revenue

- Return on Assets (ROA) = Net Profit / Total Assets

- Return on Equity (ROE) = Net Profit / Equity

➢ Debt Ratios:
- Long-term Debt to Equity = Long-term Debt / Equity

- Debt ratio = Total Liabilities / Total Assets

- Times Interest Earned = EBIT / Interest