Financial Ratios

Ratio

Formula

Current Ratio

Total Current Assets ÷ Total Current Liabilities

Quick (Acid Test) Ratio

(Cash + Net Receivables) ÷ Total Current Liabilities

Current Liabilities to Net Worth

Total Current Liabilities ÷ Net Worth ¹

Current Liabilities to Inventory

Total Current Liabilities ÷ Inventory

Sales to Receivables

Net Sales ÷ Net Receivables

Days' Receivables

365 ÷ (Net Sales ÷ Net Receivables)

Cost of Sales to Inventory

Cost of Sales ÷ Inventory

Days' Inventory

365 ÷ (Cost of Sales ÷ Inventory)

Cost of Sales to Payables

Cost of Sales ÷ Accounts Payable

Days' Payables

365 ÷ (Cost of Sales ÷ Accounts Payable)

Total Liabilities to Net Worth

Total Liabilities ÷ Net Worth

Total Liabilities to Tangible Net Worth

Total Liabilities ÷ (Net Worth - Intangible Assets - Goodwill)

Fixed Assets to Net Worth

Fixed Assets ÷ Net Worth

Fixed Assets to Tangible Net Worth

Fixed Assets ÷ (Net Worth - Intangible Assets - Goodwill)

Collection Period

(Net Receivables ÷ Net Sales) * 365

Sales to Inventory

Net Sales ÷ Inventory

Sales to Fixed Assets

Net Sales ÷ Fixed Assets

Sales to Total Assets

Net Sales ÷ Total Assets

Assets to Sales

Total Assets ÷ Net Sales

Sales to Net Working Capital

Net Sales ÷ (Current Assets - Current Liabilities)

Accounts Payable to Sales

Accounts Payable ÷ Net Sales

% Profits Before Taxes to Tangible Net Worth

(Earnings Before Taxes ÷ (Net Worth - Intangible Assets - Goodwill))*100

% Profit Before Taxes to Total Assets

(Earnings Before Taxes ÷ Total Assets)*100

Return on Sales (Profit Margin)

Net Profit ÷ Net Sales

Return on Assets

Net Profit ÷ Total Assets

Return on Net Worth (Return on Equity)

Net Profit ÷ Net Worth

Earnings Before Interest & Taxes (EBIT) to Interest

Earnings Before Interest & Taxes ÷ Interest Expense

¹ Net Worth is defined as the value of Total Stockholders Equity