Thanks to visit codestin.com
Credit goes to www.scribd.com

Scribd
Upload
23 views2 pages

Liquidity Ratio Working Capital

The document defines and provides calculations for various financial ratios to analyze a company's liquidity, solvency, stability, and profitability. It shows the company has a current ratio of 2.83, times interest earned ratio of 15%, debt ratio of 50%, and equity ratio of 50%. These ratios measure the company's ability to meet short-term obligations, debt levels, and profitability.

Uploaded by

Albert Moreno
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
23 views2 pages

Liquidity Ratio Working Capital

The document defines and provides calculations for various financial ratios to analyze a company's liquidity, solvency, stability, and profitability. It shows the company has a current ratio of 2.83, times interest earned ratio of 15%, debt ratio of 50%, and equity ratio of 50%. These ratios measure the company's ability to meet short-term obligations, debt levels, and profitability.

Uploaded by

Albert Moreno
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 2

1.

LIQUIDITY RATIO

Working Capital = Current Assets - Current Liabilities


= 850,000.00 - 700,000.00
= 150,000.00

Current Assets
Current Ratio =
Current Liabilities

850,000.00
=
300,000.00

= 2.83

Cash + Marketable Securities + Accounts Receivable


Current Ratio =
Current Liabilities
or
Total Quick Assets
=
Current Liabilities

600,000.00
=
300,000.00

= 2

2. SOLVENCY RATIO

Times Interest earned = Profit before interest and tax


ratio Interest

300,000.00
=
20,000.00

= 15%

Total Liabilities
Debt Ratio =
Total Assets

700,000.00
=
1,400,000.00

= 50%
Total Equity
Equity Ratio =
Total Assets

700,000.00
=
1,400,000.00

= 50%

3. STABILITY RATIO

Fixed Asset Turnover Net Sales


=
Ratio Fixed assets

4. PROFITABILITY RATIO

Gross Profit
Gross Margin =
Net Sales

Operating Profit
Operating Margin =
Net Sales

Net Income
Return on Assets =
Total Assets

Net Income
Return on Equity =
Equity

Operating Profit
Return on Sales =
Sales

Net Income
Return on Investment =
Total Assets

You might also like