Net Income/Average Stockholders Equity

(Indicates how much income was earned for every dollar invested by the owners) 

Cash Flows from Operating Activity/Net Income

(A ratio higher than one indicates high-quality earnings) 

Net Income/ Net Sales Revenue

(Tells percentage of each sales dollar that is income 

Current Assets/Current Liabilities

(Measures the ability of a company to pay current debts as they become due) 

Cost of Goods Sold / Average Inventory

(Measures how quickly the company sells its inventory times per year) 

Net Credit Sales/Average Net Receivables

(Measures how quickly a company collects its accounts receivables) 

Total Liabilities/Stockholders Equity

(Measures the amount of liabilities that exist for each $1 invested by the owners) 

The advantage or disadvantage that occurs as the result of earning a return on equity that is different from the return on assets.

Computed as return on equity - return on assets.

Like the current ratio, but measures the company's immediate ability to pay debts.

AKA Acid Test