11The excess of a company’s current assets over current liabilities is called working capital. 12Days in inventory is a ratio measure that shows how quickly a company can collect its...

11The excess of a company’s current assets over current liabilities is called working capital.

12Days in inventory is a ratio measure that shows how quickly a company can collect its receivables.

13The gross profit percentage is an indicator of how well a company is positioned to pay off its short-term liabilities.

14The accounts receivable turnover is an indicator of the ability of a company to collect cash from its credit customers.

15The debt ratio is the ratio of total debt divided by total equity.

17The times-interest-earned ratio measures the number of times that operating income can pay interest expense.

18The rate of return on total assets is a way to measure a company’s profitability.

19The asset turnover rate is a way to evaluate how well a company can pay its short-term liabilities.

20The rate of return on common stockholders’ equity is a commonly used way to compare the profitability of one company to another.