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CMA Entrance Exam Ratio List


Liquidity Analysis

Current Ratio Current Assets Current Liabilities
Quick Ratio
(Acid Test Ratio)
(Cash + Accounts Receivable + Short-term Investments)
Current Liabilities

Alternatively:
(Current Assets Inventory Prepaid Expenses)
Current Liabilities

Solvency Analysis

Debt-to-Equity Ratio Total Liabilities Shareholders Equity
Times Interest Earned Earnings before Interest and Taxes Interest Expense

Profitability Analysis

Return on Sales
(Profit Margin)
Net Income (or Net Profit) Sales
Return on Assets Net Income (or Net Profit) Average Total Assets
Gross Margin % Gross Margin / Sales
Return on Equity Net Income (or Net Profit) less Preferred Dividends*
Average Common Shareholders Equity

* Preferred Dividends declared on noncumulative
preferred shares plus the annual preferred dividends on
cumulative preferred shares.
Price Earnings Market Price of Shares Earnings per Share

CMA Entrance Exam Ratio List
CMA Canada 2
Activity Analysis (Asset Management Ratios)

Inventory Turnover Cost of Goods Sold Average Inventory
(When Cost of Goods Sold is not known, use Sales.)
Days Sales in Accounts
Receivable
Average Accounts Receivable (Net Credit Sales 365)
Accounts Payable
Turnover
Purchases Average Accounts Payable
Total Asset Turnover Sales Average Total Assets