Wall Street Prep Accounting Exam 2024
(complete solutions)
1. Liquidity Ratios: measures of a firm's short-term ability to meet its current
obligations
2. Profitability Ratios: measures of a firm's profitability relative to its assets (op-
erating efficiency) and to its revenue (operating profitability)
3. Activity Ratios: Measure of efficiency of a firm's assets
4. Solvency Ratios: Measure of a firm's ability to pay its obligations
5. Inventory Turnover: COGS / avg inventory
6. Receivables Turnover: revenue / average accounts receivable
7. DSO (Days Sales Outstanding): AR/Credit Sales * days in period
days in period/receivables turnover
8. A/P turnover: COGS / Average A/P
9. PPP (payables purchasing period): days in period/ Accounts payable turnover
,10. Current Ratio: current assets/current liabilities
11. Quick ratio (acid test): Cash and AR divided by current liabilities
12. Gross profit margin: gross profit/revenue
13. operating margin: operating profit/revenue
14. net profit margin: net income/revenue
15. asset turnover: revenue/ average assets
16. return on assets (ROA): Net Income / Average Assets
17. return on equity (ROE): net income/ total equity
18. Basic EPS: (Net Income - Preferred Dividends)/(Weighted Average of Shares
Outstanding)
19. Diluted EPS: diluted net income / weighted average diluted shares outstanding
20. dividend yield: dividends/net income
21. debt to EBITDA: Total Debt/EBITDA
22. interest coverage ratio: EBIT/ interest expense
23. fixed charge coverage: (EBIT + Lease charges)/(Interest Payments + Lease
charges)
24. Debt to Total Assets: Total Debt/Total Assets
, 25. debt to equity: total liabilities/total equity
(complete solutions)
1. Liquidity Ratios: measures of a firm's short-term ability to meet its current
obligations
2. Profitability Ratios: measures of a firm's profitability relative to its assets (op-
erating efficiency) and to its revenue (operating profitability)
3. Activity Ratios: Measure of efficiency of a firm's assets
4. Solvency Ratios: Measure of a firm's ability to pay its obligations
5. Inventory Turnover: COGS / avg inventory
6. Receivables Turnover: revenue / average accounts receivable
7. DSO (Days Sales Outstanding): AR/Credit Sales * days in period
days in period/receivables turnover
8. A/P turnover: COGS / Average A/P
9. PPP (payables purchasing period): days in period/ Accounts payable turnover
,10. Current Ratio: current assets/current liabilities
11. Quick ratio (acid test): Cash and AR divided by current liabilities
12. Gross profit margin: gross profit/revenue
13. operating margin: operating profit/revenue
14. net profit margin: net income/revenue
15. asset turnover: revenue/ average assets
16. return on assets (ROA): Net Income / Average Assets
17. return on equity (ROE): net income/ total equity
18. Basic EPS: (Net Income - Preferred Dividends)/(Weighted Average of Shares
Outstanding)
19. Diluted EPS: diluted net income / weighted average diluted shares outstanding
20. dividend yield: dividends/net income
21. debt to EBITDA: Total Debt/EBITDA
22. interest coverage ratio: EBIT/ interest expense
23. fixed charge coverage: (EBIT + Lease charges)/(Interest Payments + Lease
charges)
24. Debt to Total Assets: Total Debt/Total Assets
, 25. debt to equity: total liabilities/total equity
