F2- M8 - Ratio Analysis Flashcards
________ are financial indicators that distill relevant information about a business entity by quantifying the relationship among selected items on the financial statements.
Ratios
An entity’s ratios may be compared with ratios ____________. An entity’s ratios may also be compared with _______________.
1) ratios of a different period of that entity, 2) compared with competitor ratios and industry ratios.
________ ratios are measures of a firm’s short-term ability to pay maturing obligations.
Liquidity
_________ratios are measures of how effectively an enterprise is using its assets.
Activity Ratios
___________ratios are measures of the success or failure of an enterprise for a given time period.
Profitability Ratios
_______ ratios are measures of security or protection for long-term creditors/investors.
Coverage Ratios
What are the limitations for ratios
they depend entirely on the reliability of the data on which is based on server factors (such as historical cost, estimates)
What is the formula for Current Ratio
Current Assets - Current Liabilities
What is the formula for Quick Ratio
Current Assets - Inv - Prepaids/ Current Liabilities
What is the formula for A/R Turnover
Net Sales (Sales - Returns)/ Avg net A/R (Beg + ending/2)
What is the formula for days in A/R
Ending Net AR/ Net Sales
What is the formula for days in Inventory Turnover
COGS/ Average Inventory
What is the formula for days in Days in Inventory
Ending Inventory/ COGS/365
What is the formula for AP Turn over
COGS/Average AP
What is the formula for days in Payables outstanding
Ending AP/ COGS/365
What is the formula for the cash conversion Cycle
Days in AR + Days in Inv - Days of Payable Outstanding
What is the formula for Asset Turnover
Net Sales/ Avg Total Assets
What is the formula for profit margin
Net Income/ Net Sales
What is the formula for the Operating Cycle
Days in AR + Days in Inv
What is the Dupont ROA formula
PM X Asset Turnover
What is the formula for Return on Sales
EBIT/Net Sales
What is the formula for return on Asset
Net Income/ Avg total Assets
What is the formula for ROE
Net income/ Avg Total Equity
What is the formula for Gross Profit Margin
Net Sales - COGS/ Net Sales
What is the formula for Operating Cash Flow
Cash flow from Ops/ Current Liabilites
What is the formula for Debt to Equity
Total Liabilities/ Total Equity
What is the formula for Total Debt Ratio
Total Liabilities/ Total Assets
What is the formula for Equity Multiplier
Total Assets/ Total Equity
What is the formula for Times interest earned
EBIT/ Interest Exp (take out int Exp)
What is the formula for EPS
Ni - Preferred Dividends/ Weight Avg CS Outstanding
What is the formula for Price earnings ratio
Price per share/ Basis EPS
What is the formula for Dividend Payout
Cash dividends/ Net income
