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19 Cards in this Set
- Front
- Back
Working Capital - Formula (STAR): |
Working capital = Current assets - Current Liabilities |
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Current ratio (working capital ratio) - Calculation (STAR): |
Current ratio (working capital ratio) = current assets/current liabilities |
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Acid-test ratio - Calculation: |
Acid test ratio = (cash equivalents + marketable securities + Net receivables)/Current liabilities |
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Cash ratio - calculation: |
Cash ratio = (Cash equivalents + Marketable Securities)/Current Liabilities |
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Accounts receivable turnover - Formula (STAR): |
Accounts receivable turnover = Net credit sales/average net receivables
e.g = $1,800,000/[($300,000+$290,000)/2] |
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Accounts receivable turnover in days - Formula (STAR): |
Accounts receivable turnover in days = Average net receivables/[Net credit sales/365]
AKA
= 365 days/Receivable turnover |
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Total asset turnover - Formula (STAR): |
Total asset turnover = Net sales /average total assets
e.g. = $1,800,000/[($2,615,000 + $2,450,000)/2] |
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Working Capital Turnover - Formula: |
Working capital turnover = Sales/Average working capital
e.g. = ($1,800,000/[($715,000-$695,000)+($665,000 - $700,000)]/2) = 240 times |
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Inventory turnover - formula (STAR): |
Inventory turnover = Cost of Goods Sold/Average inventory
e.g. = $1,000,000/[($290,000 + $275,000)/2] |
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Inventory turnover in days - formula (STAR): |
Inventory turnover in days = Average inventory/[Cost of goods sold/365]
AKA
= 365 days/Inventory turnover |
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Operating Cycle - Formula: |
Operating cycle = AR turnover in days + Inventory turnover in days |
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Net Profit Margin - Formula (STAR): |
Net Profit margin = Net Income/Net Sales |
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Return on total assets - Formula: |
Return on total assets = Net income/Average total assets |
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DuPont return on assets - Formula: |
DuPont return on assets = Net profit margin x Total asset turnover |
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Return on investment - Formula: |
Return on investment = [Net income + Interest expense (1 - Tax rate)]/ Average(Long-term liabilities + Equity) |
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Return on common equity - formula: |
Return on common equity = (Net income - Preferred dividends)/Average common equity |
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Debt ratio - formula: |
Debt ratio = Total liabilities/Total assets |
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Times interest earned - formula: |
Times interest earned = (Recurring income before taxes & interest)/Interest
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Stent Co. had total assets of $760,000, capital stock of $150,000, and retained earnings of $215,000. What was Stent's debt-to-equity ratio? |
Equity = Capital stock + Retained earnings = $150,000 + 215,000 = $365,000
Liabilities = Assets - Equity = $760,000 - 365,000 = $395,000
$395,000/$365,000 = 1.08 |