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Definitions: Ratios or Percentages Definitions Profit margin A. Net Income (before extraordinary items) + Net Sales B. Days in Year - Receivable Tumover ratio 2 Inventory tumover ratio Average collection period C. Net Income - Average Stockholders' Equity 3 D. Net Income + Average Number of Shares of Common Stock Outstanding 4 Dividend yield ratio Retum on equity E. Retum on Equity - Retum on Assets 5 F. Quick Assets + Current Liabilities Current ratio G. Current Assets ÷ Current Liabilities Debt-to-equity ratio Cost of Goods Sold + Average Inventory Price/eamings ratio Н. Financial leverage percentage E I. Net Credit Sales - Average Net Receivables Days in Year + Inventory Tumover Ratio J. 10 Receivable tumover ratio K. Total Liabilities + Stockholders' Equity 11 Average days' supply of inventory L. Dividends per Share + Market Price per Share 12 Eamings per share Market Price per Share + Eamings per Share M. 13 Retum on assets [Net Income + Interest Expense (net of tax)] + Average Total Assets Quick ratio N. 14 O. Cash from Operating Activities (before interest and taxes) - Interest Paid 15 Times interest eamed P. Net Sales Revenue - Net Fixed Assets 16 Cash coverage ratio Q. (Net Income + Interest Expense + Income Tax Expense) - Interest Expense 17 Fixed asset tumover ratio