FINANCIAL STABILITY/LIQUIDITY RATIOS
Ratio Formula
Current ratio
Acid-test ratio
Debt-equity ratio
Receivables turnover
Inventory turnover
Payables turnover
Current Assets turnover
Fixed Assets turnover
Assets turnover
Return on total assets
Operating expense ratio
Gross profit ratio
Net profit ratio
Indicate
Current Assets Short-term debt paying ability
Current Liabilities
Quick Assets Immediate short-term liquidity
Current Liabilities
Total Liabilities Level of borrowing relative to
Total Owners’ Equity funds used to finance the
company
Net Credit Sales Liquidity of Receivables
Average Receivables
Cost Sales Liquidity of Inventory
Average Merchandise Inventory
Net Credit Purchase Efficiency of payment to creditors
Average Trade Payables
Net Sales Effectiveness in the use of current
Average Current Assets assets
Net Sales Effectiveness in the use of fixed
Average Fixed Assets assets
Net Sales Efficiency in the use of assets to
Average Total Assets generate sales
PROFITABILITY RATIOS
Net income before interest & taxes Overall profitability of assets
Average Total assets
Operating Expenses Cost incurred to support each
Net Sales peso of sales
Gross Profit Margin between selling price and
Net Sales cost of goods sold
Net Profit Net income generated by each
Net Sales peso of sales
 INVESTMENT RATIOS

Earnings per share Net Income – Preferred dividends Net income earned on each
Weighted average no. of common ordinary share
shares

Return on owners’ equity Net Income Profitability of shareholders’

Average Owners’ Equity investments

Price-earnings ratio Price per Share How much an investor would pay
Earnings per Share for each peso of current earnings

Dividend yield Dividend per Share Return on stock investments

Price per Share based on the market value of the
shares

Dividend payout Common divided per share Portion of available profits

Earnings per share distributed to common
shareholders as dividend