Teams are required to formulate definitions for the formulas needed to compute the financial ratios listed below. The created definitions will be submitted for instructor review and evaluation. Teams are expected to incorporate noted corrections in subsequent work. This is an important step that provides the foundation for activities during Weeks 4 and 5.

Ratios should be defined as follows:

  • Liquidity Ratios (define the name of the ratio group)
  • Current Ratio = Current Assets/Current Liabilities (this is how to provide the formula you will use)

Define the remaining liquidity ratio and move on to the next ratio group. Below are the ratio groups that require formulas.

Liquidity Ratios

  • Current Ratio
  • Quick Ratio

Leverage Ratios

  • Debt to Equity
  • Debt to Total Assets
  • Interest Coverage

Management Efficiency Ratios

  • Accounts Receivable Turnover
  • Days Sales Outstanding
  • Days of Inventory
  • Accounts Payable Turnover

Profitability Ratios

  • Gross Margin
  • Operating Margin
  • Return on Assets
  • Return on Equity

In your paper,

  • Define all listed ratios.
  • Create definition list using a quality reference in addition to the text.

The Course Project Part 1 – Define Project Ratios paper

For further assistance with the formatting and the title page, refer to APA Formatting for Microsoft Word (Links to an external site.).

Define Project Ratios