Sample Appendix of Accounitng - Ratio Formula

     APPENDIX

Contents

Ratio Formula        1

Common Size Analysis        2

Income Statement        2

Balance Sheet        3

Trend Analysis        4

Income Statement        4

Balance Sheet        4

Ratio Analysis        5

Ratio Formula

1. Current Ratio= Current Asset/ Current Liabilities
2. Quick Ratio= (current assets – inventories- Prepaids) / current liabilities
3. Cash ratio= Cash+ Cash Equivalent/Total Current Liability
4. Inventory Turnover Ratio= Cost of Goods Sold / ((Beginning Inventory + Ending Inventory) / 2)
5. Average number of days inventory in hand = 365/Inventory Turnover Ratio
6. Accounts payable turnover ratio: Total supplier purchases/(Beginning accounts payable + Ending accounts payable) / 2
7. Average payment period for accounts payable: 365/ Accounts payable turnover ratio
8. Purchases= (cost of sales- beginning inventory + ending inventory)
9. Accounts receivable turnover ratio= Net Annual Credit Sales/ (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
10. Average collection period for accounts receivable= 365/Accounts Receivable turnover ratio
11. Cash Lag= Average collection period for accounts receivable+ Average number of days inventory in hand- Average payment period for accounts payable
12. Gross Margin= Sales-Cost of Sales
13. Gross margin Percentage= Gross Margin/ Sales
14. Profit Margin= Net income/Net sales
15. Asset Turnover= Net Sales/Avg. Total Assets
16. Return On Asset= Asset Turnover Ratio*Profit Margin*100
17. Return on Equity=  Net Income/ Shareholders’ Equity
18. Debt to Equity Ratio= Total Liability/ Total Shareholders’ Equity
19. Dividend Payout Ratio= Common Dividend declared/Net Income
20. Interest Coverage Ratio Accrual basis= (NI+ Interest Expense+ Tax Expense)/(Interest Expense)

Common Size Analysis

Income Statement

Balance Sheet