Financial Accounting Final Review - Financial Accounting...

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Financial Accounting Final Review Ratios Return on Assets (ROA) = Net Income / Average Total Assets ROA Profit Driver Analysis Net profit margin = Net Income / Net Sales Total asset turnover = Net Sales / Average Total Assets Receivables Turnover Ratio = Net Sales / Average Net Trade Account Receivable Average days’ sale in receivables = 365/Receivables turnover (P293) Fixed Asset Turnover Ratio = Net Sale / Average Net Fixed Assets Inventory Turnover Ratio = Cost of good sold / average inventory Accounts Payable Turnover = Cost of Goods Sold / Average Accounts Payable Average Age of Payables = 365 Days / Accounts Payable Turnover Ratio Gross Profit Percentage = Gross Profit / Net Sales Cost of goods sold equation BI + P EI = CGS Quick Ratio = Quick Assets / Current Liabilities Current Ratio = Current Assets / Current Liabilities Working Capital = Current Assets – Current Liabilities Times Interest Earned Ratio = (Net Income + Interest Expense + Income Tax Expense) / Interest Expense Debt-to-Equity Ratio = Total Liabilities / Stockholders’ Equity

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