CPA Exam Financial Ratios for FAR and AUD Exam

cpa exam financial ratiosHere is a list of common CPA exam financial ratios that you will likely see in FAR and AUD. If you have other suggestions on related ratios and formulas, please let me know here.

  • Current Ratio = Current Asset/Current Liabilities.
  • Acid Test= (Current Asset- Subscription-inventory)/Current Liabilities
  • Inventory Turnover = Sales/(Average Inventory)
  • To find # of days = 365/Inventory Turnover
  • Account Receivable Turnover= COGS/(Average Account Receivable)
  • To find # of days = 365/Account Receivable Turnover
  • Working Capital Turnover = Sales/ (Average Working Capital)
  • Asset Turnover = Sales/ (Average Assets)
  • Account Payable Turnover = COGS/(Average Account Payable)
  • 365/Account Payable Turnover = COGS Turnover

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About the Author Stephanie Ng

I am the author of How to Pass The CPA Exam (published by Wiley) and the publisher of this and several accounting professional exam prep sites

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  • Ani says:

    Your Inventory Turnover is incorrect -> COGS/Average Inventory

    Your AR Turnover is incorrect -> Net Credit Sales/Average AR

  • Lauren says:

    Please fix these ratios as Ani noted. Your site is one of the first that pops up for “ratios for audit cpa exam.” If you can’t fix this misinformation, even after someone pointed it out to you, why should I trust any other info on your site?

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