4.03 Financial Ratios

Net Credit Sales / Average Net Accounts Receivable

Beginning Value of Accounts Receivable + Ending Book Value of Accounts Receivable /2 = Average Book Value of Accounts Receivable

• Earnings per share common stock

• Merchandise Inventory Turnover

• Return (rate earned) on net sales

• Accounts Receivable Turnover

Market price per share / Earnings per share common stock

• Earnings per share common stock

• Price earnings ratio

• Quick (Acid-Test) ratio

• Working Capital

Net Income / Number of shares of captial stock outstanding

• Earnings per share common stock

• Return (rate earned) on net sales

• Return (rate earned) on common stockholders' equity

• Return (rated earned) on average total assets

Net income after federal income tax / Net Sales

• Return (rate earned) on net sales

• Return (rate earned) on common stockholders' equity

• Earnings per share common stock

• Return (rate earned) on average total assets

Quick Assets / Current Liabilities

• Equity ratio

• Working Capital

• Current Ratio

• Quick (Acid-Test) Ratio

Net income after federal income tax / Average total assets

• Earnings per share common stock

• Return (rate earned) on net sales

• Return (rate earned) on common stockholders' equity

• Return (rate earned) on average total assets

Current Assets - Current Liabilities

• Equity ratio

• Working Capitaql

• Current Ratio

• Quick (Acid-Test) Ratio

365 / Accounts Receivable Turnover Rate

• Return (rate earned) on common stockholders' equity

• Average Number of Days of Payment

• Return (rate earned) on net sales

• Earnings per share common stock

Cost of Merchandise Sold / Average Merchandise Inventory

Jan 1 Merchandise Inventory + Dec 31 Mercandise Inventory / 2 = Average Merchandise Inventory

• Accounts Receivable Turnover

• Return (rate earned) on net sales

• Earnings per share common stock

• Merchandise Inventory Turnover

Total liabilities / Total assets

• Working capital

• Equity ratio

• Current ratio

• Debt ratio