1. Current Ratio = Current Asset / Current Liabilities
2. Quick Ratio = (Current Asset – Inventory)/ Current Liabilities
3. Net working capital to sales ratio = Current Asset - Current Liabilities/ Sales
Profitability Ratio
1. Gross Profit Margin = Gross Income / Sales
2. Operating Profit Margin = Operating income/ Sales
3. Net Profit Margin = Net Profit/ Sales
Operating Ratio
A ratio that shows the efficiency of a company's management by comparing operating expense to net sales. Calculated as:
= Operating Expense/ Net Sales
1. Asset Turnover Ratio = Revenue/ Average Asset
2. Sales/Revenue Per Employee = Revenue/ Number of employees
3. Operating Cycle Ratio = Days Inventory Outstanding + Days Sales outstanding - Days Payable Outstanding
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