WGU D076 Ratios and Equations Study Guide
Accounts Receivable Turnover (AR Turnover) Ans✓✓✓-An activity ratio found by
credit sales divided by accounts receivable.
Average Collection Period (ACP) Ans✓✓✓-An activity ratio found by the number
of days in a year (365) divided by AR turnover.
Current Ratio Ans✓✓✓-A liquidity ratio found by current assets divided by
current liabilities.
Current ratio Ans✓✓✓-Which ratio helps an analyst evaluate whether a company
can cover its short-term obligations?
Debt Ratio Ans✓✓✓-A financing ratio found by total liabilities divided by total
assets.
Debt-to-equity Ratio Ans✓✓✓-A financing ratios found by total liabilities divided
by total equity.
Fixed Asset Turnover (FAT) Ans✓✓✓-An activity ratio found by sales divided by
fixed assets.
Gross Margin Ans✓✓✓-A profitability ratio found by gross profit divided by sales.
Inventory Turnover Ans✓✓✓-An activity ratio found by COGS divided by
inventory
Accounts Receivable Turnover (AR Turnover) Ans✓✓✓-An activity ratio found by
credit sales divided by accounts receivable.
Average Collection Period (ACP) Ans✓✓✓-An activity ratio found by the number
of days in a year (365) divided by AR turnover.
Current Ratio Ans✓✓✓-A liquidity ratio found by current assets divided by
current liabilities.
Current ratio Ans✓✓✓-Which ratio helps an analyst evaluate whether a company
can cover its short-term obligations?
Debt Ratio Ans✓✓✓-A financing ratio found by total liabilities divided by total
assets.
Debt-to-equity Ratio Ans✓✓✓-A financing ratios found by total liabilities divided
by total equity.
Fixed Asset Turnover (FAT) Ans✓✓✓-An activity ratio found by sales divided by
fixed assets.
Gross Margin Ans✓✓✓-A profitability ratio found by gross profit divided by sales.
Inventory Turnover Ans✓✓✓-An activity ratio found by COGS divided by
inventory
