Financial Reporting & Analysis Flashcards
Current Ratio
Current Assets ÷ Current Liabilities
Quick Ratio
(Cash + Short-term marketable investments + Receivables) ÷ Current liabilities
Cash Ratio
(Cash + ST marketable investments) ÷ Current liabilities
Defensive Interval Ratio
(Cash + ST marketable investments + Receivables) ÷ Daily cash expenditures
Days of Sales Outstanding (DSO)
of days in period ÷ receivables turnover ratio
Inventory Turnover Ratio
COGS ÷ Avg. Inventory
Days of Inventory on Hand (DOH)
of days in period ÷ inventory turnover ratio
Payables Turnover Ratio
Purchase ÷ Avg. trade payables
Number of Days of Payables
of days in period ÷ payables turnover ratio
Receivables Turnover Ratio
Total revenue ÷ Avg. receivables
Cash Conversion Cycle (Net Operating Cycle)
DOH + DSO - # of days of payables ratio
Working Capital Turnover
Total revenue ÷ Avg. working capital
Fixed Asset Turnover
Total revenue ÷ Avg. net fixed assets
Total Asset Turnover
Total revenue ÷ Avg. total assets
Operating Return on Assets
Operating Income ÷ Avg. total assets
Return on Assets (ROA)
Net Income ÷ Avg. total assets
Return on Equity (ROE)
Net Income ÷ Avg. shareholders’ equity
Return on Total Capital
Earnings before interest & taxes ÷ (Interest-bearing debt + Shareholders’ equity)
Return on Common Equity
(Net Income - Preferred dividends) ÷ Avg. common shareholders’ equity
Tax Burden
Net Income ÷ Earnings before taxes
Interest Burden
Earnings before taxes ÷ Earnings before interest & taxes
Financial Leverage Ratio (Equity Multiplier)
Avg. total assets ÷ Avg. shareholders’ equity
Total Debt
Total of interest-bearing short-term and long-term debt, excluding liabilities such as accrued expenses & accounts payable
Debt-to-Assets Ratio
Total Debt ÷ Total Assets
Debt-to-Equity Ratio
Total Debt ÷ Total shareholders’ equity
Interest Coverage Ratio
EBIT ÷ Interest Payments
Fixed Charge Coverage Ratio
(EBIT + Lease payments) ÷ (Interest payments + Lease payments)
Dividend Payout Ratio
Common share dividends ÷ Net Income attributable to common shares
Retention Rate
(Net income attributable to common shares - Common share dividends) ÷ Net income attributable to common shares 1 - Payout ratio
Sustainable Growth Rate
Retention Rate * ROE
Book Value per Share
Common stockholders’ equity ÷ Total number of common shares outstanding
Free Cash Flow to Equity (FCFE)
Cash flow from operations - Investment in fixed capital + Net borrowing
Free Cash Flow to the Firm (FCFF)
Cash flow from operations + Interest expense * (1 - Tax rate) - Investment in fixed capital **Interest should only be added back if it was subtracted in determining CF from operations. This may not be case for companies electing an alternative treatment under IFRS.
