Ratios

Question 1

Accounts receivable turnover

Answer 1

Net credit sales/average net accounts receivable (less allowance for doubtful accounts). If asking for average collection period take the result of the earlier equation and do 360/x to get days.

Question 2

Quick ratio (acid test ratio, liquidity ratio)

Answer 2

Cash and cash equivalents + marketable securities + accounts receivable/ Current Liabilities.

Question 3

Inventory turnover

Answer 3

COGS/ average inventory (beginning+ending/2)

Question 4

Current ratio

Answer 4

Current assets / Current liabilities

Question 5

Profit margin on sales

Answer 5

net income/sales

Question 6

Return on equity

Answer 6

net income/ average outstanding equity