Financial Ratios

If you have difficulty answering the following questions, learn more about this topic by reading our Explanation of Financial Ratios.

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	Word Clue	Scrambled Answer	Unscrambled Answer
1.	Current assets minus current liabilities is _________ capital.	GRNOKWI	WORKING
2.	Current assets divided by current liabilities is the __________ ratio.	RTUCENR	CURRENT
3.	Cost of goods sold divided by average inventory is the inventory ______________.	NRETNVOU	TURNOVER
4.	Net ______ sales divided by accounts receivable is the receivables turnover ratio.	RDEICT	CREDIT
5.	Days sales in accounts receivable is 365 divided by the ____________ turnover ratio.	BESVEELARIC	RECEIVABLES
6.	This is excluded from the current assets when calculating the quick ratio.	TRNEYOVNI	INVENTORY
7.	Another name for the quick ratio is the ______ test ratio.	CADI	ACID
8.	_________ analysis results in all income statement amounts expressed as a percentage of net sales.	TREILAVC	VERTICAL
9.	__________-size balance sheets show all amounts as a percentage of total assets.	OMCNOM	COMMON
10.	____________ analysis results in amounts expressed as a percentage of an earlier, base year.	LAOOTHINZR	HORIZONTAL
11.	The debt to equity ratio is the ratio of ____________ to stockholders' equity.	BIISTEIIALL	LIABILITIES
12.	When dividing income statement amounts by balance sheet amounts, it is logical to use an ___________ of the balance sheet amounts.	GEVRAAE	AVERAGE
13.	Financial ratios are part of financial statement ___________.	SNIYASLA	ANALYSIS
14.	The current ratio and the quick ratio are indicators of a company's ___________.	IIUDYTIQL	LIQUIDITY
15.	The profit margin ratio and the return on assets are indicators of a company's ____________.	IYITATLORIBPF	PROFITABILITY
16.	A very large amount of debt in relation to the amount of assets indicates that a company is highly _______________.	DEAGREEVL	LEVERAGED
17.	Vertical analysis is associated with __________-size financial statements.	OOCMMN	COMMON
18.	Horizontal analysis is associated with _______ analysis.	DERTN	TREND
19.	The receivables ______________ ratio is net credit sales divided by the average amount of accounts receivable.	NVUORERT	TURNOVER
20.	Accountants calculate the inventory turnover ratio by dividing the ______ of goods sold by the average inventory.	SOCT	COST

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