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Accounts Payable： Sales： AccountsPayable divided by Annual Sales， measuring the speed with which a company pays vendors relative tosales. Numbers higher than typical industry ratios suggest that the company isusing suppliers to float operations. rZpXPI
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Assets： Sales： Total Assets divided by Net Sales， indicating whethera company is handling too high a volume of sales in relation to investment.Very low percentages relative to industry norms might indicate overlyconservative sales efforts or poor sales management. X wtqi@zlE
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Current Liabilities： Inventory： Current Liabilities divided by Inventory： A highratio， relative to industry norms， suggestsover-reliance on unsold goods to finance operations. 8?C5L8)
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Current Liabilities： Net Worth： Current Liabilities divided by Net Worth， reflectinga level of security for creditors. The larger the ratio relative to industrynorms，the less security there is for creditors. o L<St$1
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Current Ratio： Current Assets divided by Current Liabilities， measuringcurrent assets available to cover current liabilities， a test ofnear-term solvency. The ratio indicates to what extent cash on hand anddisposable assets are enough to pay off near term liabilities. *K; ~!P
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Fixed Assets： Net Worth： Fixed Assets divided by Net Worth. High ratios relative to theindustry can indicate low working capital or high levels of debt. ss-D(K"
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Gross Profit： Sales： Pre-tax profits divided by Annual Sales. This is the profit ratiobefore product and sales costs， as well as taxes. This ratio can indicate the “play” inother expenses which could be adjusted to increase the Net Profit margin. d d;T-wa}
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Net Profit： Sales： After tax profits divided by Annual Sales. This is the key profitratio，indicating how much is put in the company's pocket for each$100 of sales. K<J9 ~
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Quick Ratio： Cash plus Accounts Receivable， divided by CurrentLiabilities， indicating liquid assets available to cover current debt. Alsoknown as the Acid Ratio. This is a harsher version of the Current Ratio， whichbalances short-term liabilities against cash and liquid instruments. 6H|S ;K+
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Return on Assets： Net After Tax Profit divided by Total Assets， a criticalindicator of profitability. Companies which use their assets efficiently willtend to show a ratio higher than the industry norm. A %-6`>
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Return on Net Worth： Net After Tax Profit divided by Net Worth， this is the'final measure' of profitability to evaluate overall return. This ratiomeasures return relative to investment in the company. Put another way， Return onNet Worth indicates how well a company leverages the investment in it. :v 4]D4\o
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Return on Sales： Net After Tax Profit divided by Annual Net Sales， indicatingthe level of profit from each dollar of sales. This ratio can be used as apredictor of the company's ability to withstand changes in prices or marketconditions. WEpoBP
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Sales： Inventory： Annual Net Sales divided by Inventory value. This gives a pictureof how quickly inventory turns over. Ratios below the industry norm suggesthigh levels of inventory. High ratios could indicate product levelsinsufficient to satisfy demand in a timely manner. [00m/fT6
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Sales： Net Working Capital： Sales divided by Net Working Capital （current assets minuscurrent liabilities）。 Ratios higher than industry norms may indicate a strain on availableliquid assets， while low ratios may suggest too much liquidity. !!y a
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Total Liabilities： Net Worth： Total liabilities divided by Net Worth. This ratio helps to clarifythe impact of long-term debt， which can be seen by comparing this ratio with Current Liabilities： Net Worth.Creditors are concerned to the extent that total liability levels exceed NetWorth. The impact of long-term debt Xm&L
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Turnover Ratios： Sales divided by various line items （cash， accountsreceivable， accounts payable， inventory， current assets， total assets， fixed assets）。 These turnover rations measure operating characteristics of firms.Higher is better for Asset line items. Lower is better for Accounts PayableTurnover. Turnover ratios create a series of operating efficiency indicatorsrelative to sales.
