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Financial Ratio Analysis

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Dennis L. Thompson, CPA, CFE
Dennis L. Thompson, CPA, CFE

Brief Overview of Financial Ratio Analysis

1 of 11
Financial Ratio Analysis Dennis L. Thompson, CPA
 
The Meaningful Interpretation of Financial Statements – Donald E. Miller Nine Ratios that Measure Effect Current Assets/Current Liabilities Current Liabilities/Net Worth Total Liabilities/Net Worth Inventory/Working Capital Accounts Receivable/Working Capital Long Term Liabilities/Working Capital Net Profit/Net Worth Net Sales/Fixed Assets Net Sales/Working Capital Six Causal Ratios Fixed Assets/Net Worth Days Sales in Accounts Receivable Accounts Receivable/(Credit Sales/360) Net Sales/Inventory Net Sales/Net Worth Net Profit/Net Sales Misc Assets/Net Worth
Fixed Assets/Net Worth ,[object Object],[object Object],[object Object],[object Object]
Accounts Receivable/(Credit Sales/360)- Collection Period ,[object Object],[object Object],[object Object],[object Object],[object Object]
Net Sales/Inventory=Number of Times ,[object Object],[object Object],[object Object],[object Object],[object Object]
Net Sales/Net Worth ,[object Object],[object Object],[object Object],[object Object],[object Object]
Net Profit/Net Sales ,[object Object],[object Object],[object Object],[object Object]
Misc Assets/Net Worth ,[object Object],[object Object],[object Object],[object Object]
Current Assets/Current Liabilities ,[object Object],[object Object],[object Object],[object Object],[object Object]
Summary ,[object Object],[object Object],[object Object],[object Object]

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Financial Ratio Analysis

  • 1. Financial Ratio Analysis Dennis L. Thompson, CPA
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  • 3. The Meaningful Interpretation of Financial Statements – Donald E. Miller Nine Ratios that Measure Effect Current Assets/Current Liabilities Current Liabilities/Net Worth Total Liabilities/Net Worth Inventory/Working Capital Accounts Receivable/Working Capital Long Term Liabilities/Working Capital Net Profit/Net Worth Net Sales/Fixed Assets Net Sales/Working Capital Six Causal Ratios Fixed Assets/Net Worth Days Sales in Accounts Receivable Accounts Receivable/(Credit Sales/360) Net Sales/Inventory Net Sales/Net Worth Net Profit/Net Sales Misc Assets/Net Worth
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