Financial Ratios Flashcards
Activity Ratios
measure how efficiently a company performs day-to-day tasks
Liquidity Ratios
measure ability to meet short term obligations
Solvency Ratios
measure ability to measure long term obligations
Profitability Ratios
measure ability to generate profits from its resources
Valuation
measure quantity of an assets or flow associated with ownership of a specified claims
Inventory Turnover
cost of sales / average inventory; activity ratio
Days of Inventory on Hand (DOH)
number of days in period / inventory turnover; activity ratio
Days of Sales Outstanding (DSO)
number of days in period / receivables turnover; activity ratio
Receivables turnover
revenue / average receivables; activity ratio
Payables Turnover
purchases / average trade payables; activity ratio
Number of Days of Payables
numbers of days in period / payables turnover; activity ratio
Working Capital Turnover
revenue / average working capital; activity ratio
Fixed Asset Turnover
revenue / average net fixed assets; activity ratio
Total Asset Turnover
revenue / average total assets; activity ratio
Current Ratio
current assets / current liabilities; liquidity ratio
Quick Ratio
cash + ST marketable investments + receivables/ current liabilities; liquidity ratio
Cash Ratio
cash + ST marketable investments / current liabilities; liquidity ratio
Defensive Interval Ratio
cash + ST marketable investments + receivables / daily cash expense; liquidity ratio
Cash Conversion Cycles (Net Operating Cycle)
DOH + DSO - number of days payable; liquidity ratio
Debt-to-Assets Ratio
total debt / total assets; solvency ratio
Debt-to-Capital Ratio
total debt / total debt + total shareholders’ equity; solvency ratio
Debt-to-Equity Ratio
total debt / total shareholders’ equity; solvency ratio
Financial Leverage Ratio
average total assets / average total equity; solvency ratio
Interest Coverage
EBIT / interest payable; solvency ratio
Fixed Charge Coverage
EBIT / interest payments + lease payments
Gross Margin Profit
gross profit / revenue; profitability ratio
Operating Profit Margin
operating income / revenue; profitability ratio
Pretax Margin
EBT / revenue; profitability ratio
Net Profit Margin
net income / revenue; profitability ratio
Operating ROA
operating income / average total assets; profitability ratio
ROA
net income / average total assets; profitability ratio
Return on Total Capital
EBIT / ST and LT debt & equity; profitability ratio
ROE
net income / average total equity; profitability ratio
Return on Common Equity
net income - preferred dividends / average common equity; profitability ratio
