Ratio analysisRequiredMatch each of the following ratios with the formula used to c

Ratio analysis

Required

Match each of the following ratios with the formula used to compute it.

 

1. Working capital

a. Net income ÷ Average total stockholders’ equity

2. Current ratio

b. Cost of goods sold ÷ Average inventory

3. Quick ratio

c. Current assets ÷ Current liabilities

4. Accounts receivable turnover

d. 365 ÷ Inventory turnover

5. Average days to collect

e. Net income ÷ Average total assets

6. Inventory turnover

f. (Net income ÷ Preferred dividends) ÷ Average

 

outstanding common shares

7. Average days to sell inventory

g. (Current assets – Inventory – Prepaid expenses)

 

 ÷Current liabilities

8. Debt to assets ratio

h. Total liabilities ÷ Total equity

9. Debt to equity ratio

i. 365 ÷ Accounts receivable turnover

10. Return on investment

j. Total liabilities ÷ Total stockholders’ equity

11. Return on equity

k. Net credit sales ÷ Average net receivables

12. Earnings per share

l. Current assets ÷ Current liabilities