Financial Ratios Flashcards
Working capital
current assets - current liabilities
current ratio
current assets / current liabilities
acid-test ration (quick)
(cash equivalents + mkt securities + AR) / current liabilities
AR turnover
net credit sales / avg. AR
Inventory turnover
COGS / Avg. inventory
Operating cycle
AR turnover in days + Inventory turnover in days
Working capital turnover
Sales / Avg. working capital
Total asset turnover
Net sales / Avg. total assets
AP turnover
Purchases / Avg. AP
Note- calculating “days in”
Take the turnover ratio and divide 365 by it (i.e. 365 / Turnover #)
Net profit margin
net income / net sales
Return on total assets
net income / avg. total assets OR
net profit margin * total asset turnover
Return on investment
(net income + interest expense (1-tax) / (Avg. (LT liabilities + equity))
Return on common equity
(net income - preferred dividends) / avg. common equity
Net operating margin percentage
Net operating income / net sales
Gross profit margin percentage
Gross profit margin / net sales
Operating CF per share
operating CF / CS outstanding
Degree of financial leverage
EBIT / earnings before taxes
EPS
(net income - preferred dividends) / WACSO
PE ratio
mkt price per share / diluted EPS
Dividend payout ratio
dividends per CS / diluted EPS
Dividend yield
dividends per CS / mkt price per CS
Book value per share
(total SE - preferred stock) / number of CS outstanding
Debt to Equity
total liabilities / CS equity
Debt ratio
total liabilities / total assets
Times interest earned
EBIT / Interest
Operating CF / Total debt
I feel like this is self explanatory… go get some water (or coffee if it’s between 6-10am, 2-4pm, or after 9pm)
