KotaFibers - Liquidity Ratios Current Ratio - measures...

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Liquidity Ratios - measures firms ability to satisfy short-term obligations as they Current Ratio Current Assets Current Liabilities example 1.97:1 Quick (Acid Test) Ratio Current Assets - Inventory Current Liabilities Activity Ratios - measure speed at which various accounts are converted into s Inventory Turnover Cost of Goods Sold Inventory Inventory turnover / 365 Average Collection Period Accounts Receivable Average Sales per day or Accounts Receivable Annual Sales / 365 Average Payment Period Accounts Payable Average purchases per day Annual purchases / 365 answer Total Asset Turnover Sales Total Assets Debt Ratios - measures the amount of other peoples money being used to g Debt-to-Assets Ratio Total Liabilities Total Assets Debt-to-Equity Ratio Total Liabilities Shareholder's Equity
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Times Interest Earned Ratio Earnings before Interest and Taxes (EBIT) Interest example Profitability Ratios - enable analysts to evaluate the firms profits with respect to a g - popular tool is the common size income statement to measure
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This note was uploaded on 05/21/2011 for the course ECON 123 taught by Professor Day during the Spring '11 term at Arab Open University, Amman.

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KotaFibers - Liquidity Ratios Current Ratio - measures...

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