Accounting Ratios Equations

Question	Answer
Gross Profit Ratios	(Gross Profit / Net Sales) * 100
Net Profit Ratio	(Net Profit / Net Sales) * 100
Rate of Return on Owners Equity	(Net Profit / Average Owners Equity) * 100
Rate of Return on Total Assets	((Net Profit + Interest Expense) / Average Total Assets ) * 100
Current Ratio	Current Assets / Current Liabilities
Quick Assets Ratio	(Cash Assets + Receivables) / Current Liabilities
Lincoln Financial Health Ratio	((Net Profit + Depreciation + Amortisation) / Current Liabilities) * 100
Equity Ratio	(Owners Equity / Total Assets) * 100
Debt Ratio	(Total Liabilities / Total Assets) * 100
Lincoln Debt Ratio	(Total Liabilities / (Total Assets - Intangible Assets))
Times Interest Earned	((Net Profit + Interest Expense) / Interest Expense)
Accounts Payable Turnover	Net Credit Purchases / Average Accounts Payable
Accounts Receivable Ratios	Net Credit Sales / Average Accounts Receivable
Fixed Asset Ratio	Net Revenue / Average Fixed Assets
Inventory Ratios	Cost of Goods Sold / Average Inventories
Working Capital Turnover	Revenue / Average Working Capital
Working Capital	Current Assets - Current Liabilities
Net Revenue	Revenue - Sales Returns
Accounting Equation	A = L + O.E. + (R-E) Assets = Liabilities + Owners Equity + (Revenue - Expenses)
Average of Anything	(Beginning - Ending) / 2
Turnover of Inventories	Cost of Goods Sold / Average Inventories
Turnover of Accounts Receivable	Net Credit Sales / Average Accounts Receivable

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