RATIO FORMULA

LIQUIDITY AND EFFICIENCY

Current ratio
Acid-test ratio
Accounts receivable turnover
Inventory turnover
Day’s sales uncollected
Day’s sales inventory
Total sales turnover
Current Assets/Current Liabilities
Cash+ short term investment +current
receivable/ current liabilities
Net sales/ average account receivable
COGS/Average inventory
Account receivable/net sales X365
Ending inventory/ COGS X365
Net sales/ Average total assets

RATIO FORMULA
SOLVENCY
Debt ratio Total liabilities/total Assets
Equity ratio Total equity/total assets
Debt to Equity ratio Total liabilities/ total equity
Times interest earned Income before interest expense and
income tax expense/ Interest expense

RATIO
PROFITABILITY
Profit margin ratio
Gross margin ratio
Return on Total Assets
Return on Common Stockholder Equity
Basic earnings per share
FORMULA
Net income/net sales
Net sales- COGS/ Net sales
Net Income/ Average total assets
Net Income – Preferred dividends/
Average common stockholder’s equity
Net Income- preferred dividends/
weighted average common shares
outstanding

RATIO FORMULA
MARKET PROSPECT
Price-earnings ratio Market price per common share/
Earnings per share
Dividend yield Annual cash dividends per share/
Market price per share