Financial Ratios Flashcards
Current Ratio
Current Assets/Current Liabilities
Quick Ratio
(Current Assets - Inventory)/Current Liabilities
Average Collection Period
AR/Daily Credit Sales
AR Turnover
Credit Sales/AR
Inventory Turnover
COGS/Inventory
Total Asset Turnover
Sales/Total Assets
Fixed Asset Turnover
Sales/Fixed Assets
Operating Income Return on investment
OIROI=Operating Income/Total Assets
Debt Ratio
Total Debt/Total Assets
Times Interest Earned
EBIT/Interest Expense
ROA
Net Income/Total Assets
ROE
Net Income/Total Equity
Gross Margin
Sales-COGS/Sales
Operating Margin
EBIT/Sales
Net Margin
Net Income/Sales
DuPont Equation
ROE=Net Profit Margin x Asset Turnover x Leverage Multiplier
ROIC (rtrn on invst cap)
NOPAT/ (Costly Capital)
NOPAT
NOPAT = EBIT-Cash Taxes
Free Cash Flow to the Firm
FCFF = EBIT - Cash Tax Payments + Depreciation - CAPEX - Increases in NWC
Cash Tax Payments
Cash Tax Payments = Total tax payments from the income statement
CAPEX
Capital Expenditure (gross property, plant, and equipment) changes from two balance sheets
NWC
NWC = Net Working Capital (current assets - current liabilities) changes from two balance sheets
FCFE
Free Cash Flow to Equity Holders = Net Income + Depreciation - CAPEX - Increases in NWC + Increases in Net Long-Term Debt
Leverage Multiplier
LM = Liabilities/Equity + 1
Dupont Equation
ROE= NI/S x S/A x (L/E + 1)
Economic Value Added
EVA=NOPAT - [WACC x (costly capital)]
Debt-to-Equity
Debt-to-Equity = Debt / Equity
