Asset Turnover

A measure of profitability  that shows how efficiently assets are used to produce sales; Net sales ÷ Average Total Assets.

A measure of the ability of sales to generate operating cash flows; Net Cash Flows from Operating Activities ÷ Sales

A measure of a company's ability to generate operating cash flows in relation to net income;  

Net Cash Flows from Operating Activities

÷

Current liabilities.

A measure of short-term debt paying ability;

Current Assets

÷

Current Liabilities

A measure that shows the average number of days taken to sell inventory;

Days in Year

÷

Payables Turnover

A measure that shows the relationship of debt financing to equity financing, or the extent to which a company is leveraged;

Total Liabilities

÷

Stockholder's Equity

A measure of the relative size of inventory;

Cost of Goods Sold

÷

Average Inventory

A measure of the relative size of accounts payable;

(Cost of Goods Sold +/- Change in Inventory) ÷ Average Accounts Payable.

 A measure that shows the percentage of each revenue dollar that contributes to net income;

Net Income ÷ Net Sales.

A measure of the relative size of accounts receivable and the effectiveness of credit policies;

Net Sales ÷ Average Accounts Receivable.

A measure of overall earning power, or profitability, that show the amount earned on each dollar of assets invested;

Net Income ÷ Average Total Assets.

A measure of how much income was earned on each dollar invested by stockhoders;

Net Income ÷ Average Stockhoder's Equity.