D076 – Ratios unit test passed

AR Turnover - Is an activity/asset management ratio. Helps to identify how quickly these accounts receivables turn over during a given year. A rate of 12 indicated that the company is collecting once a month. If less or decreasing then it may indicate that the company is taking longer to collect. Credit Sales/Accounts Receivable Average Collection Period (ACP) - Is an activity ratio. Convert AR turnover into a day count measure. 365/AR Turnover Current Ratio - Is a liquidity ratio. Short-term debt paying ability. Current Assets/Current Liabilities Debt Ratio - Is a leverage ratio. Measures the proportion of the firm's assets financed with debt. Total Liabilities/Total Assets Debt-to-Equity Ratio - Is a leverage ratio. Indicates how many dollars of debt the firm has for every dollar of equity. Total Liabilities/Total Owners' Equity Fixed Asset Turnover (FAT) - Is an activity ratio. Is similar to TAT, but indicates how many dollars in sales the company generates per dollar of fixed assets (property, plant, equipment).