Tools
Financial Ratios
Liquidity Ratios
Current Ratio = Current Assets / Current Liabilities
Working Capital = Current Assets + Current Liabilities
Quick Ratio = (Current Assets – Inventories) / Current Liabilities
Activity Ratios
Working Capital Turnover = Revenue / (Current Assets + Current Liabilities)
Total Asset Turnover = Revenue / Total Assets
Accounts Receivable Turnover = Revenue / Accounts Receivable
Accounts Payable Turnover = Expenses / Accounts Payable
Inventory Turnover Ratio = Cost of Goods Sold / Inventory
Profitability Analysis Ratios
Net Profit Margin = Net Income / Revenue
Return on Assets = Net Income / Total Assets
Return on Equity = Net Income / Total Equity
Coverage Ratios
Debt Ratio = Total Liabilities / Total Assets
Equity Multiplier = Total Assets / Total Equity
Debt to Equity Ratio = Total Liabilities / Total Equity
