Your company is considering buying back some of its stock. You are assigned the task of correctly assessing the value of the company so that the company can make a rational decision.

Select 4 ratios listed below that you believe would provide the best insight into the condition of the company and provide a rationale as to why you feel that they would be most relevant.

Current Ratio                                                     = Current assets/current liabilities

Acid-test Ratio =    Cash+accounts recieveable/current liabilities

Return on equity    =    Net Income/total common equity

Return on Assets =    Net income/total assets

Profit Margin    = net income after taxes/sales

Operating return on assets =    operating profits/total assets

Accounts Receivable Turnover    =    annual credit sales/accounts recievable

Days in Inventory                                               =    inventory/daily cost of goods sold

Inventory Turnover    =    cost of goods sold/inventory

Total Asset Turnover                                       =    sales/total assets

Fixed Asset Turnover =    sales/net fixed assets

Debt-to-Ratio                                                    = total debt/total assets

Debt-to-Asset                                                    =    liability(debt)/assets

Debt-to-Equity                                                 =    total liabilities(debt)/shareholders equity