financial reports Flashcards
receivables turnover ratio
net credit sales / accounts receivable (avg)
average collection period
365 days / receivables turnover ratio
inventory turnover ratio
cost of goods sold / inventory (avg)
average days in inventory
365 days / inventory turnover ratio
current ratio
current assets / current liabilities
acid-test ratio (quick ratio)
cash + current investments + accounts receivable / current liabilities
debt to equity ratio
total liabilities / stockholders’ equity
times interest earned ratio (interest coverage ratio)
net income + interest expense + tax expense / interest expense
gross profit ratio
gross profit / net sales
profit margin
net income / net sales
asset turnover ratio
net sales / total assets (avg)
return on assets (ROA)
net income / total assets (avg)
return on equity (ROE)
net income / stockholders’ equity (avg)
earnings per share (EPS)
net income available to common stockholders / number of common shares outstanding (avg)
price-to-earnings ratio (PER)
stock price / earnings per share
ROA components
ROA = profit margin x asset turnover
cash ROA components
cash ROA = operating cash flow / total assets (avg) = cash flow to sales x asset turnover ratio = operating cash flow / net sales x net sales / total assets (avg)
ROE components
ROE = ROA x financial leverage = net income / total assets (avg) x total assets / total equity (avg)
