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7 Cards in this Set
- Front
- Back
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current ratio |
current assets/current liabilities shows liquidity (short-term financial stability) |
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debt to equity ratio |
total liabilities/owners' equity gearing ratio shows whether the creditor will be paid or if the investor can expect a good return on their money |
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gross profit |
gross profit/sales profit ratio shows changes between accounting periods |
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net profit |
net profit/sales profit ratio shows the amount of sales revenue that results in the net profit |
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return on equity |
net profit/total equity Profit ratio shows how effective the funds contributed by the owners have been generating profit |
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expenses |
total expenses/sales efficient ratio indicates the amount of sales that are allocated to individual expenses such as selling, cogs and financial expenses |
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accounts receivable turnover |
sales/accounts receivable efficiency ratio shows the effectiveness of a firm credit policy and how efficiently it collects debt |
