Financial Ratio Analysis
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The ability of the practice to pay obligations using its current assets
Liquidity/Solvency

What is the Acid Test Ratio equation?
 QuickAssets
 Current Liabilities

How do you find Quick Assets?
Current AssetsInventory

Current Ratio is.......?
 Current Assets
 Current Liabilities

What is the ratio for Inventory to Net Working Captial?
 Inventory
 Current AssetsCurrent Liabilities

Current Liabilities to Net Working Captital
 Current Liabilities
 Net Working Capital
 Current Liabilities
 Current AssetsCurrent Liabilities

The ability of a business to meet its obligations by using all its assets is.........?
Financial Position

What do you use to determine financial position?

The equations for Financial Position?
 Total Liabilities
 Net Worth
 Current Liabilities
 Net Worth

What do you use to measure Profitability?
Net Profit

What are the equations for Net Profit to measure Profitability?
 Net Profit
 Total Investment
 Net Profit
 Net Working Capital

To measure pure return on inventory what is the equation and what about it?
 *Taken out expenses
 *Looking at pure return on inventory

How the manager is controlling operations is known as?
Efficiency

What is used to measure efficiency?
Net Sales

What are the equations used to measure efficiency?
 Net Sales
 Net Working Capital
 Net Sales
 Accounts Receivable

How do you measure Inventory Turnover?
 Cost of Goods Sold
 Average Inventory at Cost

Accounts Receivable Collection Period?
 Accounts Rec. T.O. =
 Credit Sales
 Accounts Rec.
 Accts. Rec. Collection Period =
 365
 Accounts Rec. T.O.

Average Accounts Payable Remittance Time (AAPRT)...............?
 Accts Payable T.O. =
 Purchases
 Accounts Payable
 AAPRT =
 365
 Accts. Payable T.O.