Accountsreceivable turnover
		Calculation: net credit sales / average accounts receivable Measures how liquid accounts receivable  is for the year. Average Accounts Receivable is the average of the opening and closing balances for Accounts Receivable. Complete the fields below. When you are ready to see the result, click the Submit button.     Average accounts receivable   Net sales      Results   Accounts receivable turnover : 0.47   Indicates the number of times receivables were turned over during the year. This result may be considered postive or negative,  depending on the industry standard for companies of similar size and activity. A higher turnover rate generally indicates  less investment in accounts receivable because customers are paying more quickly. ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Asset utilization Calculation: net sales / total assets Measures the number of sales dollars earned for each dollar invested in assets. Complete the fields below. When you are ready to see the result, click the Calculate button.   Current assets   Fixed assets   Net sales        -------------------------------------------------------------------------------------------------------------------------------------------------------- Average collection period Calculation: (days in the period * average accounts receivable) / net credit sales Measures the average number of days customers take to pay their bills, indicating the effectiveness of credit and collection policies of the business. This ratio also determines if the credit terms are realistic. The Days in the Period is the number of days in the measurement period, normally 365. Average Accounts Receivable is the average of the opening and closing balances of Accounts Receivable for the measurement period. Complete the fields below. When you are ready to see the result, click the Calculate button. The following information may be incomplete or incorrect (Msg-219): *Please enter opening balance for accounts receivable. (Msg-033) *Please enter closing balance for accounts receivable. (Msg-079) *Please enter number of days in the measurement period. (Msg-113) *Please enter net sales. (Msg-065)     Opening balance for accounts receivable   Closing balance for accounts receivable   Number of days in the measurement period   Net sales      Coverage ratio Calculation: profit before interest and taxes / annual interest and bank charges Also known as the Number of Times Interest Earned Ratio, it measures the business' capacity to generate enough income to pay the interest on its loans. Complete the fields below. When you are ready to see the result, click the Calculate button.   Profit before interest and taxes   Annual interest and bank charges      Current ratio Calculation: current assets / current liabilities Also called the Working Capital Ratio, it measures the extent to which current assets are available to meet current liabilities (due within the next 12 months). The Current Ratio indicates whether the business has ample working capital i.e. the excess of current liabilities over current assets used to meet short-term obligations, quickly take advantage of opportunities, and qualify for favourable credit terms. Complete the fields below. When you are ready to see the result, click the Calculate button.   Current assets   Current liabilities      Days of sales in inventory Calculation: days in the period * average inventory / cost of goods sold Also called Days of Inventory Sales, this ratio indicates the possible number of days of sales with the inventory on hand. It is used to determine whether there is too great an investment in inventory. The Days in the Period is the number of days in the measurement period, normally 365. Average Inventory is the average of the opening and closing balances of inventory for the measurement period. Complete the fields below. When you are ready to see the result, click the Calculate button.   Opening balance for inventory   Closing balance for inventory   Number of days in the measurement period   Cost of goods sold      Debt-to-asset ratio Calculation: liabilities / assets Also known as Debt Asset Ratio, it measures the extent to which the acquisition of assets has been financed by creditors. Complete the fields below. When you are ready to see the result, click the Calculate button.   Current assets   Fixed assets   Total liabilities      Debt-to-equity ratio Calculation: total liabilities / shareholders' equity Measures management's reliance on creditor financing as well as the business's indebtedness compared to the amount invested by its owners. This ratio indicates the amount of liabilities the business has for every dollar of shareholders' equity. Because this ratio is a good indicator of a business's capacity to repay its creditors, it is considered very important by most term lenders. Complete the fields below. When you are ready to see the result, click the Calculate button.   Total liabilities   Shareholders' equity      Earnings per share Calculation: ( net income - preferred dividends ) / number of common shares Measures the after-tax earnings generated for each share of common stock. Earnings Per Share does not apply to preferred shareholders as they receive dividends before any dividends are made to common shareholders. Preferred dividends are subtracted from net income to calculate the amount available to common shareholders. Complete the fields below. When you are ready to see the result, click the Calculate button.   Net income   Preferred dividends   Number of outstanding common shares      Fixed asset utilization Calculation: net sales / average net fixed assets Also called the Sales to Fixed Assets Ratio, it measures the number of sales dollars earned for each dollar of investment in fixed assets. This ratio is normally used in concert with the Asset Utilization Ratio. Average Net Fixed Assets = average of the opening and closing balances of fixed assets. Complete the fields below. When you are ready to see the result, click the Calculate button.   Average net fixed assets   Sales      Inventory to net working capital Calculation: inventory / (current assets - current liabilities) Indicates if too high a proportion of current working capital is in inventory. Because inventory is a less liquid resource than cash, too high a level of inventory can indicate the inability to turn working capital into cash to meet short-term obligations. Complete the fields below. When you are ready to see the result, click the Calculate button.   Inventory   Current assets (including inventory)   Current liabilities      Inventory turnover Calculation: cost of goods sold / average inventory Measures the number of times inventory has been turned over (sold and replaced) during the year. It is a good indicator of inventory quality (whether the inventory is obsolete or not), efficient buying practices, and inventory management. This ratio is important because gross profit is earned each time inventory is turned over. Complete the fields below. When you are ready to see the result, click the Calculate button.   Cost of goods sold   Average inventory during the year     Net profit margin Calculation: net profit after taxes / net sales Also called the Return on Sales Ratio, it shows the after-tax profit (net income) generated by each sales dollar by measuring the percentage of sales revenue retained by the company after operating expenses, creditor interest expenses, and income taxes have been paid. Complete the fields below. When you are ready to see the result, click the Calculate button.   Net income after taxes   Net sales      Quick ratio Calculation: quick assets / current liabilities Also called the Acid Test Ratio or the Cash Ratio, it indicates the company's ability to pay off the immediate demands of creditors using its most liquid and current assets; these can be converted quickly into cash, temporary investments, and marketable securities. It gives a more realistic picture of a business's ability to repay current obligations than the Current Ratio as it excludes inventories and prepaid items for which cash cannot be obtained immediately. This ratio is usually used as a supplement to the Current Ratio. Complete the fields below. When you are ready to see the result, click the Calculate button.   Temporary investments and marketable securities   Cash Other current assets Current liabilities      Return on shareholders' equity Calculation: ( net income for the year - taxes - interest ) / shareholders' equity Measures the rate of return the shareholders receive on their investment in your business. Net Income for the Year is after taxes and interest because the shareholders are only entitled to the balance. Complete the fields below. When you are ready to see the result, click the Calculate button.   Shareholders' equity   Net earning   Taxes   Interest      Return on total assets Calculation: income from operations / average total assets Measures the efficiency of assets used to generate income by the amount of profit generated for every $100 invested in assets. Income from Operations excludes any expenses such as income taxes and financing charges. Average Total Assets are used due to the variation in the amount of assets used by the business. Average Total Assets = Average Current Assets + Average Fixed Assets. Complete the fields below. When you are ready to see the result, click the Calculate button.   Income from operations   Average current assets   Average fixed assets