Formula to calculate (average) collection period: Collection Period = Accounts Receivable X 365 days Credit Sales Collection Period = 365 days Accounts Receivable Turnover Ratio The average collection period calculation uses the average accounts receivable over the sales period. (Average) Read More
Acid Test Ratio (a.k.a. Quick Ratio) Accounts Receivable Turnover Advertising to Net Income Advertising to Sales After Tax Margin / After Tax Profit Margin (see Profit Margin Ratios) Age of Inventory Altman’s z-score Asset Turnover Ratio Audit Ratio Average Collection Read More
Calculate financial ratios from this list of Financial Ratio Formulas Acid Test Ratio (a.k.a. Quick Ratio) Acid Test Ratio = (cash + marketable securities) / current liabilities The acid test ratio measures the immediate amount of cash immediately available to Read More
This is the ratio of the number of times that accounts receivable amount is collected throughout the year. A high accounts receivable turnover ratio indicates a tight credit policy. A low or declining accounts receivable turnover ratio indicates a collection Read More
Gross profit margin ratio is also called gross margin ratio. A low gross profit margin ratio (or gross margin ratio) indicates that low amount of earnings, required to pay fixed costs and profits, are generated from revenues. A low gross Read More
The number of days inventory is also known as average inventory period and inventory holding period A high number of days inventory indicates that their is a lack of demand for the product being sold A low days inventory ratio Read More
The financial leverage ratio is also referred to as the debt to equity ratio. The financial leverage ratio indicates the extent to which the business relies on debt financing. Upper acceptable limit of the financial leverage ratio is usually 2:1, Read More
Debt to equity ratio definition and explanation: Debt to Equity Ratio is also referred to as Debt Ratio, Financial Leverage Ratio or Leverage Ratio. The debt to equity (debt or financial leverage) ratio indicates the extent to which the business Read More
Cash debt coverage ratio definition and explanation: The cash debt coverage ratio shows the percent of debt that current cash flow can retire. A cash debt coverage ratio of 1:1 (100%) or greater shows that the company can repay all Read More
List of Ratios Formulas and Definitions on This Website: Listed are the financial, accounting and business ratios pages that contain formulas to calculate ratios, definitions and explanations.
