Financial Ratios Flashcards
Interest Coverage Ratio
EBITDA / Interest Expense
Cash Coverage Ratio
EBITDA / Cash Interest Expense
Fixed Asset Turnover
Sales / Net Fixed Assets
Inventory Turnover
Cost of Goods Sold / Inventory
Receivables Turnover
Sales / Accounts Receivable
Days Sales Outstanding
Accounts Receivable / Sales x [365]
Days Payable Outstanding
Accounts Payable / COGS x [365]
Current Ratio
Current Assets / Current Liabilities
Quick Ratio
(Current Assets - Inventory) / Current Liabilities
Debt / Equity Ratio
Total Debt / Common Equity
Total Debt Ratio
Total Liabilities / Total Assets
Debt to Capital Ratio
Debt / Total Assets
Leverage Ratio
Total Assets / Total Equity or Total Debt / EBITDA
Return on Equity
Net Income / Equity
Return on Assets
Net Income / Total Assets
Return on Capital
NOPLAT / Total Capital (book values)
Cash ROIC
[NOPLAT + D&A] / [Gross Fixed Assets + Non-cash WC]
ROIC Adjusting for Operating Leases
Add the present value of the lease commitments to the denominator as debt and adjust operating income. This will also affect the cost of capital calculation
Operating Income + Operating Lease Expense - Depreciation on Leased Assets (straight lined)
Depending on the company, what are some common expenses you can capitalize?
R&D expenses (Biotech, technology), SG&A (Amazon), advertising (Coca Cola)
