Financial ratios Flashcards
Gross Margin
Gross Profit / Sales
Operating Margin
Operating Income / Sales
EBIT margin
EBIT / sales
Net profit margin
Net income / sales
Current ratio
Current Assets / Curret Liabilities
Quick ratio
(Cash+short-term investments+acc receivable) / current liabilities
Cash Ratio
Cash / (Current Liabilities)
Accounts Receivable Days
Acc receivable / Average daily sales
Acc payable days
Acc payable / Average daily cost of sales
Inventory days
Average daily cost of sales
Interest Coverage ratio
EBIT / Interest expense
EBITDA / Interest Coverage
EBITDA / Interest expense
Debt-Equity book ratio
Total debt / (Book value of equity)
Debt-Equity market ratio
Total Debt / (Market value of equity)
Debt-to-capital ratio
Total debt / (Total equity+Total debt)
Debt-to-enterprise ratio
Net debt / Enterprise value
Equity multiplier (book)
Total assets / Book value of equity
Equity multiplier (market)
Total assets / Market value of equity
Market-to-book ratio
(Market value of equity) / (book value of equity)
Price-earning ratio
Share price / Earnings per share
Enterprise value to sales
Enterprise value / sales
Enterpire value to EBIT
Enterprise value / EBIT
Asset turnover
Sales / Total assets
Return on equity
Net income / book value of equity
Return on assets
(Net income+interest expense) / Book value of assets
Return on invested captial
EBIT*(1-Tax%) / (Book value of equity + Net debt)
Market capitalization
Curret share price * amount of shares outstanding
Enterprise value formula
Enterprise Value (EV) =
Market capitalization (Number of Shares Outstanding * Share Price) + Interest Bearing Debt − Cash
P-E ratio
= price per share / earnings per share (net income / shares)
Current ratio
Current assets/liabilities
Quick ratio
= (cash +marketable securities + accounts receivable) / current liabilities
remember that an arbitrage oppurtunity has a positive
NPV
Selling a security that you do not own but borrow from another individual is called
short selling which is very risky
Free Cash Flows
= Net Income + Depreciation - Capital Expenditures – Change in Net Working Capital
Net Income
EBIT (1-corporate tax rate)
Enterprise Value
Market Value of Equity + Debt - Cash
1 + real interest rate =
1 + nominal interest rate / 1 + inflation rate
coupon payment formula
coupon rate * face value / number of coupon payments per year
YTM of a zero coupon bond
(Face value / PV) ^ 1/n - 1
Present value of zero coupon bond =
FV / (1 + YTM)^n
EBIT =
Gross Profit - Operating Expenses - Depreciation - Amortization
