CFA Level 1 Financial Ratios
Activity Ratios - ANS Measure how efficiently a company performs day-to-day tasks such as
the collection of receivables and management of inventory
Days of Inventory on hand - ANS days in accounting period/inventory turnover
Inventory turnover - ANS cost of goods sold/average inventory
Receivables turnover - ANS revenue (or revenue from credit sales) / average receivables
Days Sales Outstanding - ANS Number of days in period / Receivables turnover
Payable Turnover - ANS purchases / average payables
Number of days payables - ANS Number of days in period / Payables turnover
Working Capital turnover - ANS revenue / average working capital
Fixed Assets turnover - ANS revenue/ average fixed assets
total assets turnover - ANS revenue / average total assets
Liquidity Ratios - ANS Measures of the short-term ability of the company to pay its maturing
obligations and to meet unexpected needs for cash.
Current Ratio - ANS current assets / current liabilities
Quick Ratio - ANS (Current Assets - Inventory) / Current Liabilities
Cash Ratio - ANS cash + marketable securities / current liabilities
Defensive Interval Ratio - ANS (Cash + Short-term marketable investments + Receivables) /
Daily cash expenditures
Cash Conversion Cycle - ANS DOH+DSO -number of days payables
Solvency Ratios - ANS measures a businesses ability to service long term obligations i. (AKA
leverage or LT Debt ratios)
Debt-to-assets - ANS Total Debt/Total Assets
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