B. Liquidity Ratios

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Created by
RomanPlatypus92708

Cards (10)

  • Analyses the ability of management to generate adequate profits from use of firm's capital and assets. profitability ratios determine a firm's bottom line.
  • Gross Profit Margin (Gross profit / sales)
  • Operating Profit Margin ( Operation Profit / Sales)
  • Net Profit Margin (Net Profit / Sales)
  • ( Liquidity Ratios ) - Measures the extent to which a firm has adequate cash flows or liquid assets to meet the short-term liabilities of the firm
  • 2. Acid Test Ration ( Quick Ratio)
    ( Current Asset - Inventory / liability )
  • 3. Inventory Turnover Days ( Inventory / COGS)
  • 5. Average Collection Period @ AR Turnover Days ( AR / Credit Sale x 365 )
    1. Current Ratio ( Current Asset / Current Liability )
  • 4. Inventory Turnover Ratio ( COGS / Inventory )