15 Financial Statement Analysis Flashcards
Times-interest-earned formula - a firm’s ability to pay interest on debt
earnings before interest and taxes / interest expense
Current ratio formula
current assets / current liabilities
Average day sales inventory formula
365 / average inventory turnover
Quick ratio formula
quick assets (current assets - inventory - prepaids) / current liabilities
To calculate net credit sales using the accounts receivable turnover formula
average accounts receivable x accounts receivable turnover
Inventory turnover rate formula
cost of goods sold / average inventory
Asset turnover formula
sales / average total assets
Profit margin on sales formula
net income / sales
return on assets formula
net income / average total assets
return on assets percentage formula
asset turnover x profit margin on sales
Total assets turnover ratio
net sales / average total assets
Ending inventory formula
beginning inventory + purchases - COGS
How do you calculate the intrinsic value of a call option?
(Market price - exercise price) x number of shares
In a foreign currency translation capital accounts are translated at what rate?
Historical exchange rate
In a foreign currency translation monetary items such as receivables are translated at what rate?
current exchange rate at the balance sheet date
