Analytical Procedures—Ratio Analysis Form

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ANALYTICAL PROCEDURES—RATIO ANALYSIS FORM

The auditor can use this form to document the performance and evaluation of ratio analysis in connection with analytical procedures performed in an audit. The form is only a guide and is not a substitute for professional judgment. The form may be modified by adding or omitting certain ratio analysis.

CLIENT NAME:

DATE OF FINANCIAL STATEMENTS:

LIQUIDITY RATIOS

20__20__19__19__
1.Current ratio =

Current Assets
Current Liabilities____________________

Comments:

20__20__19__19__
2.Quick or acid test ratio =

Current Assets - Inventory
Current Liabilities____________________

Comments:

PROFITABILITY RATIOS

20__20__19__19__
1.Gross profit ratio =

Net Sales - Cost of Goods Sold
Net Sales____________________

Comments:

20__20__19__19__
2.Operating margin ratio =

Income before Income Taxes and Interest
Net Sales____________________

Comments:

20__20__19__19__
3.Net income ratio (or profit margin ratio) =

Net Income
Net Sales____________________

Comments:

20__20__19__19__
4.Return on total assets ratio =

Net Income + Interest Expense
Total Assets____________________

Comments:

20__20__19__19__
5.Return on equity ratio =

Net Income
Average Stockholders’ Equity____________________

Comments:

LEVERAGE RATIOS

20__20__19__19__
1.Debt to assets ratio =

Total Debt
Total Assets____________________

Comments:

20__20__19__19__
2.Debt to equity ratio =

Long-Term Debt
Stockholder’s Equity____________________

Comments:

20__20__19__19__
3.Times interest earned ratio =

Income before Income Taxes and Interest
Interest Expense____________________

Comments:

ACTIVITY RATIOS

20__20__19__19__
1.Inventory turnover =

Cost of Goods Sold
Average Inventory____________________

Comments:

20__20__19__19__
2.Average age of inventory =

360 Days
Inventory Turnover____________________

Comments:

20__20__19__19__
3.Accounts receivable turnover =

Net Sales
Average Accounts Receivable____________________

Comments:

20__20__19__19__
4.Days sales in accounts receivable =

360 Days
Accounts Receivable Turnover____________________

Comments:

20__20__19__19__
5.Asset turnover =

Net Sales
Total Assets____________________

Comments:

Prepared by

Date

Approved by

Date
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