Accounting III Review

Division of Work:

• Ethan-Current ratio(acct 2-ch1)- current assets/current liabilities

• Ethan-Return on Sales Ratio(acct2-ch1)- net income/sales

• Ethan-Debt to Equity Ratio(acct 2-ch 1)- total debt/total shareholder equity

• Ethan-Return on Investment(acct 2-ch2)-net income/average total assets (page 41)

• Alex-Quick ratio(acct 2-ch2)-(Cash+short-term investments+receivables)/Current liabilities (page 42)

• Alex-Return on Owners' Equity(acct 2-ch2)- net income/average owners' equity (Page 42)

• Alex-Gross Margin Ratio(acc 2-ch2)- Gross margin/sales (Page 42)

• Alex-Contribution Margin Ratio(acct 2-4)-Contribution Margin per unit/selling price per unit (Page 101-103)

Ethan

• Accounts Receivable Turnover(acc 2-ch2)- sales/average accounts receivable=turnover, 365/turnover=days (Page 43)

• Inventory Turnover(acc2-ch2)- Cost of Sales/average inventory=turnover, 365/turnover=days (Page 43-44)

• Accounts payable turnover-(acc2-ch2) cost of sales/average accounts payable=turnover, 365/turnover=days (Page 44)