Question

what are the formulas a. Current Ratio b. Leverage Ratio (financial leverage) c. Gross Profit (Gross...

what are the formulas

a. Current Ratio

b. Leverage Ratio (financial leverage)

c. Gross Profit (Gross Margin on the site)

d. Return on Equity

e. Return on Assets

f. Return on Sales

h. Asset Turnover

I.Inventory Turnover

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Homework Answers

Answer #1

Formulas:

a.

Current Ratio = Current Asset / Current Liabilities

b.

Financial Leverage = Total Debt / Stockholders' Equity

c.

Gross Profit = Net sales - Cost of goods sold

Gross margin ratio = Gross Profit / Net sales

d.

Return on equity = Earning available for equity shareholder / Stockholder's Equity

e.

Return on Asset = Net income / Average Total Asset

f.

Return on sale = Net income / Total sales

h.

Asset Turnover = Net sales / Average total assets

i.

Inventory Turnover = Cost of goods sold / Average inventory

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