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 number of days to

e. Net income ÷ Average total assets

collect receivables

f. (Net income - Preferred dividends) ÷ Average

6. Inventory turnover

outstanding common shares

7. Average number of days to

g. (Current assets - Inventory - Prepaid items) ÷

sell inventory

Current liabilities

8. Debt to assets ratio

h. Total liabilities ÷ Total assets

9. Debt to equity ratio

i. 365 days ÷ Accounts receivable turnover

10. Return on investment

j. Total liabilities ÷ Total stockholders’ equity

11. Return on equity

k. Net credit sales ÷ Average accounts receivables

12. Earnings per share

l. Current assets ÷ Current liabilities

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Related Questions

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 number of days to	e. Net income ÷ Average total assets
collect receivables	f. (Net income - Preferred dividends) ÷ Average
6. Inventory turnover	outstanding common shares
7. Average number of days to	g. (Current assets - Inventory - Prepaid items) ÷
sell inventory	Current liabilities
8. Debt to assets ratio	h. Total liabilities ÷ Total assets
9. Debt to equity ratio	i. 365 days ÷ Accounts receivable turnover
10. Return on investment	j. Total liabilities ÷ Total stockholders’ equity
11. Return on equity	k. Net credit sales ÷ Average accounts receivables
12. Earnings per share	l. Current assets ÷ Current liabilities