Financial Homework Help

formulas.docx

Liquidity
Current Ratio	Current Assets Current Liabilities
Quick Ratio	Current Assets – Inventory Current Liabilities
Average Collection Period	365 / Accounts Receivable Turnover
Accounts Receivable Turnover	Credit Sales Accounts Receivable
Inventory Turnover	Cost of Goods Sold Inventory
Operating Profitability
Profit Margin	Net Income Sales
Return on Total Assets	Net Income Total Assets
Fixed Assets Turnover	Sales Net Fixed Assets (Property, Plant, & Equipment)
Total Asset Turnover	Sales Total Assets
Return on Equity	Net Income Stockholders’ Equity
Debt
Debt Ratio	Total Liabilities Total assets

Presume all sales are credit sales.

Customers are given credit terms of 2/10, n/30.