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Accounting Ratio

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Submitted By adleee84
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Liquidity Ratios

• Measures the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.

• Ratios include the current ratio, the acid-test ratio, receivables turnover, and inventory turnover.

Liquidity ratio = current asset___ current liabilities

= 360042949 266476991

= 1.35

Asid test ratio = cash + short - long term investment + receivable (net) Current liabilities = 238446962+26656729+76692918____________________ 266476991 = 1.28

Receivable turnover = __Net credit sales____ Average net receivable

= 574273012 (238446962+138220476)/2

= 3.049 : 1

365 days / 3.049 times = 119.71 days

This means that receivables are collected on average every 217 days

Inventory turnover = cost of goods sold Average inventory

= 461246689 (18246340+2574857)/2 = 44.31

Profitability Ratios

• Measures the income or operating success of a company for a given period of time.

• Income, or lack of it, affects the company’s ability to obtain debt and equity financing, liquidity position, and ability to growth.

• Rates include the profit margin, assets turnover, return on assets, return on common stockholders equity, earnings per share, price earnings, and payout ratio

Profit margin = Net income Net sales

= 31446428 574273012

= 0.054

Measures the percentage of each dollar of

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