Definitions: 


Ratios or Percentages 
Definitions 
A. 
Net Income (before extraordinary items) ÷ Net Sales 

1 
Profit margin 

B. 
Days in Year ÷ Receivable Turnover ratio 

2 
Inventory turnover ratio 

C. 
Net Income ÷ Average Stockholders’ Equity 

3 
Average collection period 

D. 
Net Income ÷ Average Number of Shares of Common Stock Outstanding 
4 
Dividend yield ratio 

E. 
Return on Equity − Return on Assets 

5 
Return on equity 

F. 
Quick Assets ÷ Current Liabilities 

6 
Current ratio 

G. 
Current Assets ÷ Current Liabilities 

7 
Debttoequity ratio 

H. 
Cost of Goods Sold ÷ Average Inventory 

8 
Price/earnings ratio 

I. 
Net Credit Sales ÷ Average Net Receivables 

9 
Financial leverage percentage 
E 
J. 
Days in Year ÷ Inventory Turnover Ratio 

10 
Receivable turnover ratio 

K. 
Total Liabilities ÷ Stockholders’ Equity 

11 
Average days’ supply of inventory 

L. 
Dividends per Share ÷ Market Price per Share 

12 
Earnings per share 

M. 
Market Price per Share ÷ Earnings per Share 

13 
Return on assets 

N. 
[Net Income + Interest Expense (net of tax)] ÷ Average Total Assets 

14 
Quick ratio 

O. 
Cash from Operating Activities (before interest and taxes) ÷ Interest Paid 

15 
Times interest earned 

P. 
Net Sales Revenue ÷ Net Fixed Assets 

16 
Cash coverage ratio 

Q. 
Solutions

Please see the attachment for solution 

Attachment 1: CF Unit5 E135 Match each.xls

Solution Posted By: Homeworkhelp Posted on:
22022018 


