Chapter 13, Problem 13.6E

Matching Each Ratio with Its Computational Formula

Match each ratio or percentage with its formula by entering the appropriate letter for each numbered item.

	Ratios or Percentages	Formula
_______	1. Current ratio	A. Net income ÷ Total revenue
_______	2. Net profit margin	B. (Net sales revenue – Cost of goods sold) ÷ Net sales revenue
_______	3. Inventory turnover ratio	C. Current assets ÷ Current liabilities
_______	4. Gross profit percentage	D.  Cost of goods sold ÷ Average inventory
	5. Fixed asset turnover	E.  Net credit sales revenue÷Average net receivables
_______	6. Return on equity	F.  (Net income – Preferred clividends) ÷ Average number of common shares outstanding
_______	7. Times interest earned	G.  Total1iabilities ÷ Total assets
_______	8. Debt-to-assets ratio	H.  (Net income + Interest expense + Income tax expense) ÷ Interest expense
_______	9. Price/earnings ratio	I. Current market price per share ÷ Earnings per share
_______	10. Receivables turnover ratio	J. (Net income – Preferred dividends) ÷ Average common stockholders' equity
_______	11. Earnings per share	K. Total revenue ÷ Average net fixed assets