Question

Q-2 FINANCIAL RATIO FORMULAS Match each of the following financial ratios with its formula: Accounts Payable Tunover Ratio Fixed Asset Turnover Ratio Asset Turnover Ratio Cash Coverage Ratio Cash Ratio Current Ratio Average Age of Receivables Average Days Supply in Inventory Receivable Turnover Ratio Debt-to-Equity Ratio Earnings per Share (EPS) Financial Leverage Percentage Times Interest Earned Ratio Inventory Turnover Ratico Price/ Earnings (P/E) Ratio Profit Margin Quality of Income Quick Ratio Return on Equity (ROE) Return on Assets (ROA) A. Cost of Goods SoldAverage Inventory B. (Cash and Cash Equivalents) Current Liabilities C. Cash Flows from Operating Activities (before interest and taxes paid) ÷ Net Income D. Cash Flows from Operating Activities+Net Income E. (Cash + Short-Term Investments +Accounts Receivable, Net)Current Liabilities F. Total Liabes Stockholders Equity G. (Net Income+Interest Expense (net of tax))Average Total Assets H. Current Market Price per Share Earnings per Share I. (Net Income +Interest Expense+Income Tax Expense) Interest Expense J. Return on Equity-Return on Assets K. Net IncomeAverage Number of Shares of Common Stock Outstanding L. Net Credit Sales ÷ Average Net Receivables M. Net Sales Revenue N. Net IncomeNet Sales Revenue O. Days in a Year ÷ Inventory Turnover Ratio P. Days in a Year ÷ Receivables Turnover Ratio Q. Current Assets Current Liabilities R. Net Income Average Stockholders' Equity S. Net Sales Revenue ÷ Average Net Fixed Assets T. Cost of Goods Sold Average Accounts Payable Average Total Assets

Answer 1

The answer (ratios have been matched to their formulas) have been provided below:

S. no	Ratio	Formula	Formula label
1	Accounts payable turnover ratio	Cost of goods sold/average accounts payable	T
2	Asset turnover ratio	Net sales revenue/average total assets	M
3	Cash coverage ratio	Cash flows from operating activities (before interest and taxes paid)/net income	C
4	Cash ratio	(Cash and cash equivalents)/current liabilities	B
5	Current ratio	Current assets/current liabilities	Q
6	Average age of receivables	Days in a year/receivables turnover ratio	P
7	Average days' supply in inventory	Days in a year/inventory turnover ratio	O
8	Debt to equity ratio	Total liabilities/stockholder's equity	F
9	Earnings per share (EPS)	Net income/average number of shares of common stock outstanding	K
10	Financial leverage percentage	Return on equity - Return on assets	J
11	Fixed assets turnover ratio	Net sales revenue/average net fixed assets	S
12	Inventory turnover ratio	Cost of goods sold/average inventory	A
13	Price/Earning (P/E) ratio	Current market price per share/earnings per share	H
14	Profit margin	Net income/net sales revenue	N
15	Quality of income	Cash flows from operating activities/net income	D
16	Quick ratio	(Cash+short term investments+accounts receivables)/current liabilities	E
17	Receivable turnover ratio	Net credit sales/average net receivables	L
18	Return on Equity (ROE)	Net income/average shareholder's equity	R
19	Return on Assets (ROA)	(Net income+interest expense (net of tax))/average total assets	G
20	Times interest earned ratio	(Net income+interest expense+income tax expense)/interest expense	I