| Ratio |
|
Computation |
| Allowance for doubtful accounts as a percent-age of accounts receivables |
= |
Allowance for Doubtful Accounts
Year-end Accounts Receivable |
| Bad debt expense as a percentage of net credit sales |
= |
Bad Debt Expense
Net Credit Sales |
| Accounts receivable turnover |
= |
Net Credit Sales
Average Accounts Receivable (net) |
| Days sales in accounts receivable |
= |
Accounts Receivable (net)
Net Sales/360 |
| Inventory turnover |
= |
Cost of Sales
Average Inventory |
| Days of inventory on hand |
= |
Inventory
Cost of Sales/360 |
| Gross profit percentage |
= |
Net Sales - Cost of Sales
Net Sales |
| Current ratio |
= |
Current Assets
Current Liabilities |
| Quick ratio |
= |
Quick Assets
(Cash Marketable Securities + Net Receivables)
Current Liabilities |
| Liabilities to equity |
= |
Total Liabilities
Equity |
| Debt to equity |
= |
Long-term Debt
Equity |
| Times interest earned |
= |
Income before Interest and Taxes
Interest Expense |
| Return on total assets |
= |
Net Income
Average Total Assets |
| Asset turnover |
= |
Net Sales
Average Total Assets |
| Return on equity |
= |
Net Income
Average Equity |
| Return on net sales |
= |
Net Income
Net Sales |
| Operating expenses as a percentage of net sales |
= |
Operating Expenses
Net Sales |
