A4 - Financial Ratios Flashcards
Current ratio
Current assets / current liabilities
Acid-test ratio
Cash (& equivalents) + marketable securities + net A/R / current liabilities
Cash ratio
Cash (& equivalents) + marketable securities / current liabilities
A/R turnover
Net credit sales / average net receivables
A/R turnover (in days)
Average net receivables / (net credit sales/365)
Inventory turnover
COGS / average inventory
Inventory turnover (in days)
Average inventory / (COGS/365)
Operating cycle
A/R turnover (in days) + inventory turnover (in days)
Working capital turnover
Net sales / average working capital
Net profit margin
Net income / net sales
Return on total assets
Net income / average total assets
DuPont return on assets
Net profit margin x total asset turnover
Return on investment
Net income + interest expense x (1 - tax rate) / average (LT liabilities + equity)
Return on common equity
(Net income - preferred dividends) / average common equity
Debt to equity ratio
Total liabilities / common stockholders’ equity
Debt ratio
Total liabilities / total assets
Times interest earned
EBIT / interest
Operating cash flow to total debt ratio
Operating cash flow / total debt
Total asset turnover
Net sales / average total assets
Working capital
Current assets - current liabilities
Total asset turnover
Net sales / average total assets
A/P turnover
COGS / average accounts payable
Days in A/P
Average accounts payable / (COGS/365)
Net operating margin percentage
Net operating income / net sales
Gross (profit) margin percentage
Gross (profit) margin / net sales
Operating cash flow per share
Operating cash flow / common shares outstanding
Degree of financial leverage
EBIT / EBT
Earnings per share
Net income - preferred dividends / weighted-average common shares outstanding
Price/earnings ratio
Market price per share / diluted earnings per share
Dividend payout ratio
Dividends per common share / diluted earnings per share
Dividend yield
Dividends per common share / market price per common share
Book value per share
Total stockholders’ equity - preferred stock / number of common share outstanding
