Finance 3313 Worksheet 11 Last Updated , April 11 , 2016 3 - 2 Liquidity Ratios Industry 2013 2012 Average Liquidity ratios* Current Ratio = CA / CL 2. 0 2. 2 2.2 Quick Ratio = ( CA - Inventories ) / CL 0 . 7 0 . 8 0 . 8 3 - 3 Asset Management Ratios Industry 2013 2012 Average Asset Management ratios Total Asset Turnover = Sales / TA 1 . 8 Fixed Asset Turnover = Sales / Fixed assets 3 Days Sales Outstanding = Accounts receivable / Daily sales* 30 Inventory Turnover = COGs / Inventories* 3 -4 Debt Management Ratios* Industry 2013 2012 Average Debt Management ratios Debt Ratio = Debt - to - Assets Ratio = Total debt / TA 25.090 Debt - to - Equity Ratio = Total debt / Total common equity* 0. 46 Market Debt Ratio = Total debt / ( Total debt + Market Cap ) 20. 090 Liabilities - to - Assets Ratio = TL / TA 45. 090 Times Interest Earned = EBIT / Interest expense 10. 0 EBITDA Coverage Ratio = 12.0 3 - 5 Profitability Ratios Industry 2013 2012 Average Profitability ratios Profit Margin = Net income / Sales 6 . 290 Basic Earning Power = EBIT / TA 20. 290 Return on Assets = Net income / TA 1 1 . 09/0 Return on Equity = Net income / Total common equity 19. 090 3 - 6 Market Value Ratios Industry 2013 2012 Average Market Value ratios Price - to Earnings Ratio = Price / ( Net income / # shares ) 10.5 Price - to - Cash Flow Ratio = 6.3 Price - to - EBITDA Ratio = 4.0 Market - to - Book Ratio = Price / ( Total common equity / # shares ) 1. 8