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Finance 201 > Financial Ratios > Flashcards

Financial Ratios Flashcards

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1
Q

Current Ratio

A

Current Assets/Current Liabilities

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2
Q

Quick Ratio

A

(Current Assets - Inventory)/Current Liabilities

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3
Q

Average Collection Period

A

AR/Daily Credit Sales

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4
Q

AR Turnover

A

Credit Sales/AR

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5
Q

Inventory Turnover

A

COGS/Inventory

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6
Q

Total Asset Turnover

A

Sales/Total Assets

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7
Q

Fixed Asset Turnover

A

Sales/Fixed Assets

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8
Q

Operating Income Return on investment

A

OIROI=Operating Income/Total Assets

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9
Q

Debt Ratio

A

Total Debt/Total Assets

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10
Q

Times Interest Earned

A

EBIT/Interest Expense

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11
Q

ROA

A

Net Income/Total Assets

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12
Q

ROE

A

Net Income/Total Equity

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13
Q

Gross Margin

A

Sales-COGS/Sales

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14
Q

Operating Margin

A

EBIT/Sales

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15
Q

Net Margin

A

Net Income/Sales

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16
Q

DuPont Equation

A

ROE=Net Profit Margin x Asset Turnover x Leverage Multiplier

17
Q

ROIC (rtrn on invst cap)

A

NOPAT/ (Costly Capital)

18
Q

NOPAT

A

NOPAT = EBIT-Cash Taxes

19
Q

Free Cash Flow to the Firm

A

FCFF = EBIT - Cash Tax Payments + Depreciation - CAPEX - Increases in NWC

20
Q

Cash Tax Payments

A

Cash Tax Payments = Total tax payments from the income statement

21
Q

CAPEX

A

Capital Expenditure (gross property, plant, and equipment) changes from two balance sheets

22
Q

NWC

A

NWC = Net Working Capital (current assets - current liabilities) changes from two balance sheets

23
Q

FCFE

A

Free Cash Flow to Equity Holders = Net Income + Depreciation - CAPEX - Increases in NWC + Increases in Net Long-Term Debt

24
Q

Leverage Multiplier

A

LM = Liabilities/Equity + 1

25
Q

Dupont Equation

A

ROE= NI/S x S/A x (L/E + 1)

26
Q

Economic Value Added

A

EVA=NOPAT - [WACC x (costly capital)]

27
Q

Debt-to-Equity

A

Debt-to-Equity = Debt / Equity

Finance 201 (7 decks)

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