1.x Financial Statement Analysis Flashcards
How do you calculate Working Capital?
Currents Assets - Current Liabilities
How do you calculate the Current Ratio?
Currents Assets / Current Liabilities
How do you calculate the Quick Ratio (acid test)?
(Cash + Accounts Receivable + Marketable Securities) / Current Liabilities
How do you calculate the Receivables (A/R) Turnover Ratio?
Net Credit Sales / Average (beginning and ending) Accounts Receivable
How do you calculate the Current cash debt coverage ratio?
Net cash provided by operating activities / Average Current Liabilities
How do you calculate the Average Collection Period (Number of Days’ Sales in Average Receivables)? (both formulas)
365 / Receivables Turnover -OR-
Average Receivables / Daily credit sales
How do you calculate Inventory Turnover?
COGS / Average Inventory
How do you calculate Number of Days’ Supply in Inventory?
365 / Inventory Turnover
How do you calculate the Length of the Operating Cycle?
Number of days’ sales in average receivables + Number of days’ supply in average inventory
How do you calculate the Asset Turnover Ratio?
Net Sales / Average Total Assets
How do you calculate the Profit Margin on sales?
Net income / Net sales
How do you calculate Return on assets?
Net income / Average total assets
How do you calculate Return on (Common) Equity?
(Net income - preferred dividends) / Average common stockholders’ equity
Note: Avg. CSE = Common Stock + Retained Earnings
How do you calculate Earnings per share (EPS)?
(Net income - preferred dividends ) / Weighted shares outstanding
How do you calculate the Price-earnings ratio?
Market price of stock/earnings per share
How do you calculate the Dividend Payout Ratio? (both formulas)
Dividends per common share / EPS -OR-
Cash dividends / Net income
How do you calculate the Debt to Equity Ratio?
Total Liabilities / Stockholders’ Equity (Net Assets)
How do you calculate the Debt to Total Assets Ratio?
Total Liabilities / Total Assets
How do you calculate the Times Interest Earned Ratio?
EBIT / Interest Expense
How do you calculate Book value per common share?
Common stockholders’ equity / number of common shares outstanding
Currents Assets - Current Liabilities equals what formula?
Working Capital
Currents Assets / Current Liabilities equals what formula?
Current Ratio
(Cash + Accounts Receivable + Marketable Securities) / Current Liabilities equals what formula?
Quick Ratio (acid test)
Net Credit Sales / Average (beginning and ending) Accounts Receivable equals what formula?
Receivables (A/R) Turnover Ratio
