Unformatted text preview: 3 INVENTORY TURNOVER: cost of goods sold / average inventory 4 AVERAGE COLLECTION PERIOD: 365 / accounts receivable turnover ratio 365 / (net sales / average net accounts receivable) SOLVENCY RATIOS 1 DEBT TO TOTAL ASSETS: total liabilities / total assets 5 TIMES INTEREST EARNED: Nbit / interest expense 1 FREE CASH FLOWS: net cash inflows from operating activities - (capital expenditures + cash dividends) PROFITABILITY RATIOS 1 BASIC EARNINGS PER SHARE: (net income - * preferred dividends, if any) / weighted average common shares outstanding 3 GROSS PROFIT RATE: gross profit / net sales 3 PROFIT MARGIN: net income / net sales 5 RETURN ON ASSETS: net income / average assets 5 ASSET TURNOVER: net sales / average assets 6 RETURN ON COMMON STOCKHOLDERS’ EQUITY: (net income - * preferred stock dividends, if any) / average common stockholders’ equity * most companies do not have preferred stock, therefore, there wouldn’t be any preferred stock dividends....
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This note was uploaded on 04/03/2012 for the course ACCT 272 taught by Professor Mensah during the Fall '08 term at Rutgers.
- Fall '08
- Financial Accounting