Ratios - FAR CPA Exam
Current Ratio correct answer Current Assets/Current Liabilities
Quick Ratio correct answer (Current Assets- Inventory)/ Liabilities
Accounts Receivable Turnover correct answer Sales (net)/Average Accounts Receivable (net)
Days Sales in Accounts Receivable correct answer Ending Accounts Receivable (net)/ (Net
Sales/365)
Inventory Turnover correct answer Cost of Goods Sold/Average Inventory
Days in Inventory correct answer Ending Inventory/ (Cost of Goods Sold/365)
Accounts Payable Turnover correct answer Cost of Goods Sold / Average Accounts Payable
Days of Payables Outstanding correct answer Ending Accounts Payable/ (Cost of Goods
Sold/365)
Cash Conversion Cycle correct answer Days Sales in Accounts Receivable + Days in Inventory -
Day of Payables Outstanding
Asset Turnover correct answer Net Sales/ Average total assets
Profit Margin correct answer Net Income/ Net Sales
Return on Assets correct answer Net Income/ Average Total Assets
