D076 WGU Ratios and Equations
GRADED A+
Accounts Receivable Turnover (AR Turnover) ✔✔✔- An activity ratio found by credit sales divided by
accounts receivable.
Average Collection Period (ACP) ✔✔✔- An activity ratio found by the number of days in a year (365)
divided by AR turnover.
Current Ratio ✔✔✔- A liquidity ratio found by current assets divided by current liabilities.
Current ratio ✔✔✔- Which ratio helps an analyst evaluate whether a company can cover its short-term
obligations?
Debt Ratio ✔✔✔- A financing ratio found by total liabilities divided by total assets.
Debt-to-equity Ratio ✔✔✔- A financing ratios found by total liabilities divided by total equity.
Fixed Asset Turnover (FAT) ✔✔✔- An activity ratio found by sales divided by fixed assets.
Gross Margin ✔✔✔- A profitability ratio found by gross profit divided by sales.
Inventory Turnover ✔✔✔- An activity ratio found by COGS divided by inventory
Leverage Ratios ✔✔✔- A category of ratios that consider how a firm is financed.
Liquidity Ratios ✔✔✔- A category of ratios that measure a firm's ability to meet short-term obligations.
GRADED A+
Accounts Receivable Turnover (AR Turnover) ✔✔✔- An activity ratio found by credit sales divided by
accounts receivable.
Average Collection Period (ACP) ✔✔✔- An activity ratio found by the number of days in a year (365)
divided by AR turnover.
Current Ratio ✔✔✔- A liquidity ratio found by current assets divided by current liabilities.
Current ratio ✔✔✔- Which ratio helps an analyst evaluate whether a company can cover its short-term
obligations?
Debt Ratio ✔✔✔- A financing ratio found by total liabilities divided by total assets.
Debt-to-equity Ratio ✔✔✔- A financing ratios found by total liabilities divided by total equity.
Fixed Asset Turnover (FAT) ✔✔✔- An activity ratio found by sales divided by fixed assets.
Gross Margin ✔✔✔- A profitability ratio found by gross profit divided by sales.
Inventory Turnover ✔✔✔- An activity ratio found by COGS divided by inventory
Leverage Ratios ✔✔✔- A category of ratios that consider how a firm is financed.
Liquidity Ratios ✔✔✔- A category of ratios that measure a firm's ability to meet short-term obligations.
