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CMA Part II Prep FINAL > Financial Ratio Summary > Flashcards

Financial Ratio Summary Flashcards

1
Q

Current ratio

A

current assets / current liabilities

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2
Q

Quick (acid test) ratio

A

(cash + marketable securities + accounts receivable) / current liabilities

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3
Q

Cash ratio

A

(cash + marketable securities) / current liabilities

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4
Q

cash flow ratio

A

operating cash flow / current liabilities

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5
Q

net working capital ratio

A

net working capital / total assets

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6
Q

degree of financial leverage

A

% change in net income / % change in EBIT

EBIT / EBT

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7
Q

degree of operating leverage

A

% change in EBIT / % change in sales

contribution margin / EBIT

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8
Q

financial leverage ratio (equity multiplier)

A

assets / equity

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9
Q

debt to equity ratio

A

total debt / equity

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10
Q

long-term debt to equity ratio

A

(total debt - current liabilities) / equity

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11
Q

debt to total assets ratio

A

total debt / total assets

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12
Q

fixed charge coverage

A

earnings before fixed charges and taxes / fixed charges

fixed charges include interest, required principal repayment, and leases

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13
Q

interest coverage (times interest earned)

A

EBIT / interest expense

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14
Q

cash flow to fixed charges

A

(cash from operations + fixed charges + tax payments) / fixed charges

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15
Q

accounts receivable turnover

A

credit sales / average gross accounts receivable

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16
Q

inventory turnover

A

cost of goods sold / average inventory

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17
Q

accounts payable turnover

A

credit purchases / average accounts payable

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18
Q

days sales in receivables

A

average accounts receivable / (credit sales / 365)

365 / accounts receivable turnover

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19
Q

days sales in inventory

A

average inventory / (cost of sales / 365)

365 / inventory turnover

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20
Q

days purchases in payables

A

average payables / (purchases / 365)

365 / payables turnover

21
Q

operating cycle

A

days sales in receivable + days sales in inventory

22
Q

cash cycle

A

operating cycle - days purchases in payables

23
Q

total asset turnover

A

sales / average total assets

24
Q

fixed asset turnover

A

sales / average net property, plant, and equipment

25
Q

gross profit margin percentage

A

gross profit / sales

26
Q

operating profit margin percentage

A

operating income / sales

27
Q

net profit margin percentage

A

Net income / sales

28
Q

EBITDA margin

A

EBITDA/sales

29
Q

ROA

A

net income / average total assets

30
Q

ROE

A

net income / average equity

31
Q

market to book ratio

A

current stock price / book value per share

32
Q

price earnings ratio

A

market price per share / EPS

33
Q

book value per share

A

(total stockholders’ equity - preferred equity) / number of common shares outstanding

34
Q

basic EPS

A

(net income - preferred dividends) / weighted average common shares outstanding

number of shares outstanding is weighted by the number of months shares are outstanding

35
Q

diluted EPS

A

(net income - preferred dividends) / diluted weighted average common shares outstanding

Diluted EPS adjusts common shares by adding shares that may be issued for convertible securities and options

36
Q

earnings yield

A

EPS / current market price per common share

37
Q

dividend yield

A

annual dividends per share / market price per share

38
Q

dividend payout ratio

A

common dividend / earnings available to common shareholders

39
Q

shareholder return

A

(ending stock price - beginning stock price / annual dividends per share) / beginning stock price

40
Q

DuPont ROA

A

net profit margin x total asset turnover

(net income / sales) x (sales / average total assets)

net income / average total assets

41
Q

DuPont ROE

A

ROA x financial leverage

(net income / average total assets) x (average total assets / average equity)

net income / average equity

42
Q

sustainable growth rate

A

(1 - dividend payout ratio) x ROE

43
Q

net working capital

A

current assets - current liabilities

44
Q

breakeven point in units

A

fixed costs / unit contribution margin

45
Q

breakeven point in dollars

A

fixed costs / (unit contribution margin / selling price)

46
Q

margin of safety

A

planned sales - breakeven sales

47
Q

margin of safety ratio

A

margin of safety / planned sales

48
Q

price elasticity of demand

A

(change in quantity / average of quantities) / (change in price / average of prices)

49
Q

profitability index

A

pv of future cash flow / initial investment

CMA Part II Prep FINAL (14 decks)

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