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CPCU 540: Formulas Questions And Answers With Verified Solutions 100% Correct!!!
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CPCU 540: Formulas Questions And Answers With Verified Solutions 100% Correct!!!
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CPCU 540: Formulas Questions AndAnswers With Verified Solutions 100%
Correct!!!
Accounts Receivable turnover ratio - ANSWER✔✔ Credit sales / Accounts
Receivable
Days Sales Outstanding - ANSWER✔✔ 365 / Accounts Receivable Ratio
Asset Turnover Ratio - ANSWER✔✔ Sales / Total Assets
Inventory Turnover ratio - ANSWER✔✔ Cost of goods sold / inventory
Working capital - ANSWER✔✔ Current assets - current liabilities
Current ratio - ANSWER✔✔ Current assets / current liabilities
Acid-test Ratio, or quick ratio - ANSWER✔✔ (Cash + marketable securities +
accounts receivable) / current liabilities
Debt - to - equity ratio - ANSWER✔✔ Long-term debt / shareholders' equity
Debt - to - assets ratio, or debt ratio - ANSWER✔✔ total liabilities / total assets
Net profit margin - ANSWER✔✔ net income / sales
, Return on Assets (ROA) - ANSWER✔✔ Net income / total assets
Return on Equity (ROE) - ANSWER✔✔ Net income / shareholders' equity
Equity Multiplier - ANSWER✔✔ Total assets / shareholders' equity
DuPont Identity - ANSWER✔✔ Net profit margin x Asset turnover x Equity
Multiplier
Premium-to-surplus ratio - ANSWER✔✔ Net written premiums / policyholders'
surplus
Reserve-to- surplus ratio - ANSWER✔✔ (Unearned premium reserves + loss and
LAE reserves) / policyholders' surplus
Liquidity ratio - ANSWER✔✔ (cash + invested assets) / (unearned premium
reserves + loss and LAE reserves)
Loss ratio - ANSWER✔✔ (Incurred losses + LAE) / earned premiums
Expense ratio - ANSWER✔✔ Underwriting expenses / written premiums
Combined ratio - ANSWER✔✔ Loss ratio + expense ratio
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