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Intermediate Accounting 2 > Financial Management Formulas > Flashcards

Financial Management Formulas Flashcards

1
Q

Gross Profit Ratio

A

Gross Profit Ratio = Sales - COGS / Sales

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2
Q

Operating Profit Ratio (Return onn Sales)

A

Operating Margin = Operating Income (EBIT) / Sales

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3
Q

Net Profit Ration

A

Profit Margin = Net Income (NOPAT) / Sales

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4
Q

Return on Assets

A

Return on Assets = Net Income / Total Assets or Profit Margin x Asset Turnover

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5
Q

Return on Equity

A

Net Income / Shareholder’s Equity

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6
Q

Earnings Per Share

A

EPS = Net Income - Pref. Shares Dividends / Weighted Ave. Shares Outstanding

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7
Q

Price/Earnings Ration

A

P/E Ratio = Price Per Share / Earnings Per Share

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8
Q

Dividend Payout Ration

A

Dividend Payout Ration = Dividend Per Share / Earnings Per Share

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9
Q

Dividend Yield Ration

A

Dividend Yield Ration = Dividend Per Share / Market Price Per Share

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10
Q

Current Ratio

A

Current Ratio = Current Assets / Current Liabilities

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11
Q

Quick Ratio

A

Quick Assets / Current Liabilities

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12
Q

Accounts Receivable Turnover

A

Accts. Rec. Turnover = Net Sales / Ave. Accounts Receivable

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13
Q

Average Collection Period

A

Average Collection Period = 365 / AR Turnover Ratio

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14
Q

Inventory Turnover

A

Inventory Turnover Ratio = COGS / Average Inventory

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15
Q

Average Sales Period

A

Average Sales Period = 365 / Inventory Turnover Ratio

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16
Q

Operating Cycle

A

Operating Cycle = Average Collection Period + Average Sales Period

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17
Q

Debt Ratio

A

Debt Ratio = Total Liabilities / Total Assets

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18
Q

Debt - to - Equity Ratio

A

Total Liabilities / Total Equity

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19
Q

Times - Interest - Earned

A

TIE Ratio = EBIT / Interest Expense

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20
Q

Rate of Return on Sales

A

Rate of Return on Sales = Net Income / Net Sales

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21
Q

Rate of Return on Total Assets

A

Return on Sales x Asset Turnover or Net Income / Average Total Assets

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22
Q

Asset Turnover

A

Net Sales / Average Total Assets or total investment in the business

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23
Q

Operating Ratio

A

Cost of Sales + Operating Expenses / Net Sales

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24
Q

Rate of Return on Current Assets

A

Net Income / Average Current Assets

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25
Q

Current Asset Turnover

A

Cost of Sales + Operating Expenses (excluding charges not requiring current assets) / Average Current Assets

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26
Q

Rate of Return Per Current Asset Turnover

A

Rate of Return on Current Asset / Current Asset Turnover

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27
Q

Rate of Return on Working Capital

A

Net Income / Average Working Capital

28
Q

Working Capital Turnover

A

Cost of Sales + Operating Expenses (Excluding charges not requiring working capital) / Average Working Capital

29
Q

Rate of Return per Working Capital Turnover

A

Rate of Return on Working Capital / Working Capital Turnover

30
Q

Invested Capital Turnover

A

Net Sales / Average Owner’s Equity

31
Q

Rate of Return on Owner’s Equity

A

Net Income / Average Owner’s Equity or rate of return on sales x invested capital turnover

32
Q

Earnings Per Share

A

Net Income - Preferred stock dividend requirement / Ave. no. of common shares outstanding

33
Q

Price - earnings Ratio

A

Market Price Per Share / Earnings Per Share

34
Q

Capitalization Rate or Earnings/Price Ration

A

Earnings per share / Market Price per Share

35
Q

Dividends per Share

A

Dividend Paid or Declared / Common Share Outstandning

36
Q

Yield on common stock

A

Dividend per Share / Market Value per Share of common stock

37
Q

Payout Ratio

A

Dividends per share / earnings per share

38
Q

Retained Earnings to Capital Stock

A

Retained Earnings / Capital Stock

39
Q

Market Price to Book Value per Share

A

Market Price per Share / Book Value per share

40
Q

Current Ratio

A

Current Assets / Current Liabilities

41
Q

Acid Test Ratio

A

Quick Assets / Current Liabilities

42
Q

Current Assets to Total assets

A

Currents Assets / Total Assets

43
Q

Ratio of Each Current Asset Item to Total Current Assets

A

Each Current Asset Item / Total Current Assets

44
Q

Receivable Turnover

A

Net Credit Sales / Average Receivable

45
Q

Number of days sales in average receivable or average collection period

A

360/Receivable Turnover

46
Q

Merchandise Inventory (or Finished Goods) Turnover

A

COGS / Average Inventory

47
Q

Work in Process Turnover

A

Cost of Goods Manufactured / Average Work in Process Inventory

48
Q

Raw Materials Turnover

A

Raw Materials Used / Average Raw Materials Inventory

49
Q

Number of Days Supply in Inventory

A

360/Invetory Turnover

50
Q

Working Capital Turnover

A

COGS + Operating Expenses (excluding charges not requiring working capital) / Average Working Capital

51
Q

Current Asset Turnover

A

COGS + Operating Expenses (excluding charges not requiring current assets) / Average Current Assets

52
Q

Payable Turnover

A

Net Credit Purchases / Average Payables

53
Q

Cash and Marketable Securities Turnover

A

COGS + Operating Expenses / Average Marketable Securities

54
Q

Number of Days Operations Covered by Cash and Marketable Securities

A

360 days/Cash and Marketable Securities Turnover or Average cash and marketable securities / COGS - Operating Expenses excluding charges not requiring cash /360

55
Q

Debt / Equity Ratio

A

Total Liabilities / Owner’s Equity

56
Q

Equity / Debt Ratio

A

Owner’s Equity / Total Liabilities

57
Q

Proprietary (Equity) Ratio or Owner’s Equity to total assets

A

Owner’s Equity / Total Assets

58
Q

Debt Ratio or Total Liabilities to Total Assets

A

Total Liabilities / Total Assets

59
Q

Fixed Assets to Total Owner’s Equity

A

Fixed Assets / Total Owner’s Equity

60
Q

Fixed Assets to Total Equity (or total assets)

A

Fixed Assets / Total Liabilities and Owner’s Equity

61
Q

Fixed Assets to Total Long-term liabilities

A

Fixed Assets / Total Long-term liabilities

62
Q

Plant Turnover

A

Net Sales / Ave. Fixed Assets (net)

63
Q

Book Value per share

A

Common Stock Equity (EBIT) / Number of common shares outstanding

64
Q

Number of Times Interest is earned

A

Income before interest and taxes / Annual Interest Charges

65
Q

No. of times preferred dividend requirement is earned

A

Net income after tax / preferred stock dividend requirement

66
Q

No

A

Intermediate Accounting 2 (2 decks)

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