3. Net prota margin for fot feturnon Sonos) 4. Ratu on totat assets 5. Retum on stoskhotaars Sauity 6 Enrrengs per-share 2 Qunck ratio (or acid-test Worcng capital A. Debitomssets mo Sales cost ot goods sole ‘Sales Corment assnts — Current intuit Total dent Tota acest Key Financial Ratios: How to Calculate Them and What They Mean Higher ie Soter, and tro tend should be upward Shows ahortax profits per dollar of sales. Higher ic otter and te trond shows be upward A measure of the retum on tote snvestment inthe, enterprise, Interest is ackiod s> after-tax profits tm ‘Sem fe rummenstor since total asueie are sinances Gycroaters na wall a by stockhosdars: Hicher Satter and the trond shoud be Upward Shows the return stockholders are aaming on theer westmont in the enserorise: A rahirn into 12-15 Borcort range is average, and the tend shoud Shows the earings tor each share of common Stock sutataraaing. Ties trend sous te spweata Gna the bigger tes arimusl perseramae aires oe Sater acots Sint can be conweresd bo aaa iy tho ewes Soom. Roms sheula sohmitaly be maghorton 1-0 Tallos of 2 or higher ate botier St Shows a firm's ability to poy curren liabilities Southeast relying on tne sale of ite Swarnorine Bigger amounts ar hatter becmune the comnany Fae rote intemal funcs avalible to (1) pay Se sumone havens am a tmary Semis ane (2) fractions of ramos are beter — hugh {racbons indicat Seoruse ot debt and greater risk of bankruptcy:Table #.1 Continued 2 Debt-tequity cmlle & Longeterm aetna eaulty rat {er covecnge) sao Activity ration 2 mwertory tumawer pened AL Devan wet on 2. Preelenmings ratio Diver payout matio 4. internal casts flow